Last Update 11 Dec 25
TTKOM: Upgraded Rating Will Support Confidence As Margin Expansion Strengthens
Analysts have modestly raised their price target on Türk Telekomünikasyon Anonim Sirketi to TRY 57.80, reflecting increased conviction in the company’s near term upside potential following a recent upgrade to Accumulate and supportive fundamentals.
Analyst Commentary
Analysts highlight a balanced risk reward profile for Türk Telekomünikasyon Anonim Sirketi, with improving fundamentals supporting the recent price target increase to TRY 57.80. While the near term outlook has strengthened, some execution and macro sensitivities remain in focus.
Bullish Takeaways
- Bullish analysts see the upgraded price target as reflecting stronger visibility on earnings growth, supported by resilient subscriber trends and disciplined pricing.
- Improving operating leverage and cost control are viewed as key drivers for margin expansion, which underpins upside potential compared with current valuation multiples.
- Ongoing investments in network quality and digital services are expected to sustain top line momentum and support a re rating as execution continues to meet guidance.
- Analysts note that the stock still trades at a discount to regional telecom peers on forward earnings, suggesting further room for multiple expansion if growth delivers as expected.
Bearish Takeaways
- Bearish analysts remain cautious on macro and currency volatility, which could pressure translated earnings and limit the realization of the full upside implied by the new target.
- There are concerns that competitive intensity in mobile and fixed broadband could constrain pricing power, weighing on revenue growth and margin progression.
- Execution risks around capital expenditure and regulatory changes are seen as potential drags on free cash flow generation and, in turn, on the sustainability of higher valuations.
- Some analysts argue that a portion of the near term improvement is already priced in, leaving less room for further re rating if growth normalizes or guidance is not revised higher.
What's in the News
- Türk Telekomünikasyon Anonim Sirketi recently hosted an Analyst/Investor Day, providing updates on strategic priorities and financial outlook (Key Developments).
Valuation Changes
- Fair Value: Unchanged at TRY 73.89, indicating no revision to the long term intrinsic value estimate.
- Discount Rate: Stable at 29.57 percent, suggesting no reassessment of the company’s risk profile or cost of capital.
- Revenue Growth: Effectively unchanged at approximately 35.17 percent, reflecting consistent expectations for top line expansion.
- Net Profit Margin: Remains around 9.25 percent, with only immaterial rounding differences versus the prior estimate.
- Future P/E: Steady at about 13.54x, indicating no material change in forward valuation multiples applied to earnings.
Key Takeaways
- Expanding subscriber base and successful upselling are driving strong revenue growth and improved operating margins, capitalizing on rising data demand and digitalization trends.
- Ongoing fiberization and new market expansion, combined with operational efficiencies, position the company for future margin improvements and enhanced cash flow.
- Intensifying competition, rising investment needs, currency risks, and revenue concentration threaten growth, margin stability, and long-term market position.
Catalysts
About Türk Telekomünikasyon Anonim Sirketi- Operates as an integrated telecommunication company in Turkey.
- Sustained growth in subscriber base-especially in mobile postpaid segments and higher-speed fixed broadband tiers-reflects the benefit of a young, growing population and rising data consumption, translating into expanding addressable markets and continued revenue growth.
- Strong ARPU performance in both fixed broadband (17% YoY growth) and mobile (driven by postpaid) supported by proactive pricing, recontracting, and upselling initiatives, indicating the company's ability to capitalize on increasing digitalization and data demand, which should positively impact both top-line revenue and operating margins.
- Significant broadband fiberization progress, with fiber now comprising 91% of the broadband base, enhances network competitiveness and enables further ARPU and margin expansion as customers migrate to higher-margin, higher-speed packages.
- First-mover expansion into Northern Cyprus fiber infrastructure and retail services positions Türk Telekom to open new B2B and B2C revenue streams by serving underserved regions, leveraging ongoing megatrends in digital infrastructure rollout and smart city enablement for future revenue and earnings growth.
- Continued operational efficiency, as evidenced by falling OpEx to sales ratios and improved EBITDA margins, alongside the potential for 5G rollout and infrastructure upgrades, is likely to further improve profitability and support higher earnings and cash flow over the long term.
Türk Telekomünikasyon Anonim Sirketi Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming Türk Telekomünikasyon Anonim Sirketi's revenue will grow by 32.9% annually over the next 3 years.
- Analysts assume that profit margins will increase from 6.1% today to 10.0% in 3 years time.
- Analysts expect earnings to reach TRY 41.0 billion (and earnings per share of TRY 10.9) by about September 2028, up from TRY 10.8 billion today.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 13.2x on those 2028 earnings, down from 17.2x today. This future PE is lower than the current PE for the TR Telecom industry at 17.2x.
- Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 28.69%, as per the Simply Wall St company report.
Türk Telekomünikasyon Anonim Sirketi Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- Fierce competition in the Turkish mobile market, with record MNP activity and abundant promotional offers, is driving higher subscriber churn and could create sustained pricing pressure-this threatens ARPU growth and top-line revenue momentum.
- Expanding CapEx requirements, including accelerated 5G rollout, fiber deployment, and international projects, increase financial exposure and may weigh on free cash flow and net margins if return on investment is delayed or capital costs rise.
- Elevated foreign currency exposure and a significant portion of debt in hard currency expose the company to earnings volatility, particularly in periods of Turkish lira depreciation or heightened financial market volatility-this can negatively impact net profits through higher financial expenses.
- Declining segments such as international operations (with a 13% YoY contraction) and ICT solutions, along with dependency on fixed and mobile for majority of revenue growth, create risk of revenue concentration and reduced diversification benefits over time.
- The potential entrance of a fourth mobile operator and regulatory changes in Turkey may further intensify competition and margin pressure, jeopardizing the company's long-term market share, operating margins, and profitability.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of TRY72.401 for Türk Telekomünikasyon Anonim Sirketi based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of TRY102.5, and the most bearish reporting a price target of just TRY45.2.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be TRY411.2 billion, earnings will come to TRY41.0 billion, and it would be trading on a PE ratio of 13.2x, assuming you use a discount rate of 28.7%.
- Given the current share price of TRY52.7, the analyst price target of TRY72.4 is 27.2% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
