Last Update 15 May 26

Fair value Increased 13%

TELIA: Limited Upside And Cautious Ratings Will Likely Restrain Overvalued Shares

Narrative Update

The updated analyst price target for Telia Company changes from SEK 39.60 to SEK 44.85. Analysts point to adjusted assumptions on revenue growth, profit margins, discount rate and future P/E to support the revision.

Analyst Commentary

Recent research on Telia Company reflects a mix of optimism on valuation and caution on upside potential. Several firms have adjusted price targets, while some have shifted ratings, giving you a range of views to weigh.

Bullish Takeaways

Bullish analysts raising price targets, including moves of SEK 3, SEK 4 and SEK 8, suggest that their updated models support a higher fair value for the stock under current assumptions.
Multiple upward price target revisions over recent months point to increased confidence in Telia's ability to support current earnings assumptions and P/E multiples.
Analysts maintaining or setting Equal Weight type stances alongside higher targets indicate that, in their view, Telia can justify a somewhat richer valuation without requiring aggressive growth assumptions.
The cluster of upward target moves, including to SEK 41 in one case, gives investors additional reference points when comparing Telia's current share price with externally assessed value ranges.

Bearish Takeaways

Bearish analysts downgrading the stock to more neutral ratings cite limited upside to their price targets, signaling concern that much of the perceived value may already be reflected in the share price.
The presence of a downgrade alongside several target increases highlights uncertainty around Telia's ability to deliver on execution assumptions embedded in the more optimistic models.
Conservative rating changes suggest that some analysts see a less compelling risk or reward setup, even where absolute target levels remain above or close to current trading levels.
For investors, the combination of higher targets and more cautious ratings is a reminder to stress test personal expectations for earnings, cash generation and P/E against both optimistic and more restrained scenarios.

What's in the News

Telia reiterated its earnings guidance for 2026, keeping the outlook for service revenue growth, like for like, around 2%, which gives you a reference point for how management currently sees the business trajectory (Corporate guidance).
At the AGM on April 9, 2026, shareholders approved a total dividend of SEK 2.05 per share. It will be paid in four instalments of SEK 0.51, SEK 0.51, SEK 0.51 and SEK 0.52 per share, with record dates set for April 13, July 23, October 29, 2026 and February 5, 2027 (AGM decision).
The dividend is scheduled to be paid via Euroclear Sweden AB on April 16, July 28, November 3, 2026 and February 10, 2027. If you hold the stock, these are the key dates to track for expected cash flows (AGM decision).
Telia and Bittium Corporation jointly implemented a hybrid network that links the Finnish Defence Forces’ tactical communications network with Telia’s 5G network. The aim is to provide secure and continuous data transfer across a wider area for defense and cooperation with authorities and allied partners (Company announcement).
The hybrid network uses Bittium’s FUSOR software router and a Mobile Ad hoc Network, with ongoing testing and validation of the setup in operational environments. This development may influence how you think about Telia’s role in specialized communications solutions over time (Company announcement).

Valuation Changes

Fair Value: Raised from SEK 39.60 to SEK 44.85, indicating a higher assessed value per share based on the updated model inputs.
Discount Rate: Reduced from 5.80% to 5.46%, which increases the calculated present value of future cash flows in the model.
Revenue Growth: Shifted from a 1.96% decline to 2.21% growth, moving from a contraction assumption to a modest expansion in SEK revenue.
Net Profit Margin: Edged up from 11.30% to 12.12%, reflecting slightly stronger expected profitability on SEK sales.
Future P/E: Adjusted from 19.40x to 19.75x, signaling a small change in the earnings multiple used to value Telia Company in future periods.

3 views

Key Takeaways

Strong growth in broadband and bundled services, as well as network upgrades, is enabling Telia to boost revenue, margins, and deepen customer loyalty.
Portfolio focus, digitalization, and cost reductions are improving capital allocation, driving free cash flow and supporting higher shareholder returns.
Digital disruption, stagnant demographics, costly network upgrades, fierce competition, and weak service differentiation threaten Telia's pricing power, revenue growth, and long-term profitability.

Catalysts

About Telia Company

Provides communication services to businesses, individuals, families, and communities in Sweden, Finland, Norway, Denmark, Lithuania, Estonia, and Latvia.What are the underlying business or industry changes driving this perspective?

Sustained growth in high-speed broadband and mobile data demand, fueled by digitalization of society and adoption of unlimited plans, is leading to recurrent price increases and rising ARPU, especially in Swedish households-positively impacting long-term revenue and profit growth.
Advancing convergence across connectivity, TV, media, and cloud services allows Telia to deepen customer relationships and reduce churn, driving up household ARPU and supporting stable, recurring revenue streams and higher EBITDA margins over time.
Ongoing transformation and portfolio restructuring-such as the exit from non-core markets (Latvia) and targeted acquisitions (Bredband2)-enables more focused capital allocation in core Nordic/Baltic operations, improving earnings quality and enhancing ROE and long-term earnings growth.
Deployment of advanced 5G capabilities and targeted fiber investments presents revenue opportunities across both consumer and enterprise segments, enabling Telia to address emerging IoT and advanced connectivity needs for industry and public sector clients, lifting top-line growth and future profitability.
Continued execution of cost optimization programs and digitalization of internal processes are driving significant operating expense reductions, supporting EBITDA margin expansion and increasing free cash flow, which will underpin future dividend growth and shareholder returns.

Telia Company Earnings and Revenue Growth

Telia Company Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Telia Company's revenue will grow by 2.2% annually over the next 3 years.
Analysts assume that profit margins will increase from 5.7% today to 12.1% in 3 years time.
Analysts expect earnings to reach SEK 10.5 billion (and earnings per share of SEK 2.63) by about May 2029, up from SEK 4.6 billion today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as SEK12.0 billion.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 19.7x on those 2029 earnings, down from 41.8x today. This future PE is lower than the current PE for the GB Telecom industry at 30.5x.
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 5.46%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

Proliferation of over-the-top (OTT) services and ongoing digital disruption continues to reduce the relevance of traditional telco offerings, putting pressure on Telia's ability to maintain pricing power and threatening long-term revenue growth as consumers shift away from bundled or legacy services.
Stagnant or negative demographic trends-like aging populations and limited population growth in core Nordic/Baltic markets-constrain Telia's organic subscriber growth, particularly in mature segments such as Sweden and Finland, potentially capping revenue expansion opportunities.
Substantial ongoing and future CapEx requirements for network upgrades (e.g., 5G/6G, fiber rollouts), coupled with rising environmental and decarbonization regulation costs, risk compressing EBITDA margins and free cash flow as infrastructure investment outpaces immediate monetization opportunities.
Intensifying competition from low-cost MVNO entrants and new digital-native providers creates persistent downward price pressure in mobile and broadband markets, leading to ARPU stagnation and increased churn, especially as technology enables easier unbundling of telecom services.
Telia's lack of substantial differentiation in value-added or digital services versus global tech giants limits its ability to lift ARPU or offset declining legacy revenues, which may continue to strain net margins and challenge long-term earnings growth despite recent cost optimization and portfolio simplification.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of SEK44.85 for Telia Company 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 SEK59.0, and the most bearish reporting a price target of just SEK30.7.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be SEK86.4 billion, earnings will come to SEK10.5 billion, and it would be trading on a PE ratio of 19.7x, assuming you use a discount rate of 5.5%.
Given the current share price of SEK49.37, the analyst price target of SEK44.85 is 10.1% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
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.

Have other thoughts on Telia Company?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

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.

TELIA: Disciplined Capital Allocation And Cost Efficiency Will Drive Steady Performance