TELIA: Cost Discipline And Efficiency Will Drive Stronger Profitability Ahead

Analysts have raised their fair value estimate for Telia Company from SEK 45.24 to SEK 48.00, citing recent price target increases and expectations that disciplined capital allocation and cost efficiency will continue to support improving profitability, even with slightly weaker revenue growth assumptions.

Analyst Commentary

Recent Street research indicates that bullish analysts are incrementally more confident in Telia Company's ability to execute on its strategic priorities, reflected in a series of upward price target revisions. These adjustments, while measured, signal growing conviction that the company can sustain margin improvements and capital discipline despite a moderating revenue outlook.

JPMorgan's latest move to lift its Telia price target to SEK 40 from SEK 38, while maintaining a Neutral stance, underscores a view that the current valuation more appropriately reflects the gradual improvement in profitability. At the same time, other bullish analysts have nudged targets higher as they factor in a more resilient earnings profile emerging from ongoing efficiency initiatives.

Collectively, these changes suggest that the market is beginning to recognize Telia's progress on cost optimization and balance sheet management, even if top line growth expectations remain conservative. The higher fair value estimate aligns with this trend, indicating that operational execution is starting to be rewarded in forward-looking valuation models.

Bullish Takeaways

• Bullish analysts are raising price targets, signaling increased confidence that Telia's disciplined capital allocation and cost controls will translate into structurally higher margins and a more attractive risk reward profile.
• The move by JPMorgan to lift its target to SEK 40 supports the view that recent profitability gains are not purely cyclical, but instead reflect durable operational improvements that justify a higher valuation multiple.
• Incremental target upgrades point to an improving sentiment backdrop, with bullish analysts seeing limited downside at current levels and scope for upside if execution on efficiency and cash generation continues.
• As expectations for revenue growth remain restrained, the positive revisions highlight a belief that Telia's focus on profitability and disciplined investment can still drive value creation and support a re rating over time.

What's in the News

• Coor and Telia are extending their Integrated Facility Management Agreement for five years from 1 January 2026, covering workplace services such as cleaning, reception, and restaurant operations across about 40 offices in Sweden and Norway (Key Developments)
• The renewed agreement focuses on cost savings, sustainability, innovation, and continuous development in how facility services are delivered to Telia's sites (Key Developments)
• The contract is structured as a vested outsourcing model, with Telia and Coor jointly developing the agreement and sharing responsibility for achieving targets measured through agreed performance indicators (Key Developments)

Valuation Changes

• Fair Value Estimate has risen from SEK 45.24 to SEK 48.00, reflecting a modest upward reassessment of Telia Company's intrinsic value.
• Discount Rate has increased from 4.92 percent to approximately 5.72 percent, implying a slightly higher required return in the updated valuation model.
• Revenue Growth has been revised down from around minus 1.79 percent to about minus 2.06 percent, indicating a marginally more cautious top line outlook.
• Net Profit Margin has improved from roughly 12.43 percent to about 13.52 percent, signaling expectations for better profitability despite softer revenue assumptions.
• Future P/E multiple has edged up slightly from 19.52x to approximately 19.66x, suggesting a marginally higher valuation being applied to forward earnings.