Barclays Backs These 5 EU Telcos as AI and Satellite Risks Hit the Sector

Barclays maintains a neutral stance on its European Telecom Services report, estimating a 4-7% five-year revenue risk for the sector, which translates to an 8-13% EBITDA headwind. Despite a reduction in terminal growth assumptions, five stocks remain overweighed, with their price targets trimmed by 5-10%. DTE is identified as a core holding in the European telecoms landscape due to its exposure to the more supportive regulatory and competitive environment in the US market.

Among the five stocks, DTE is seen as a core holding in European telecoms, while KPN and Telia are upgraded from equal weight to overweight. Barclays cites defensive properties and a supportive competitive and regulatory environment as reasons for these upgrades, with KPN's revenue impact estimated at 5.3%, EBITDA impact at 8%, and theoretical equity impact at -7%.

Telia is described as a relative safe haven in EU Telcos, with steady execution in Sweden and expectations for mid-term FCF growth supported by the 2027 CMD. The estimated revenue impact for Telia is 4.4%, EBITDA headwind at 8%, and theoretical equity impact at -7%.