Telefonica outlines growth strategy, plans modest revenue boost

Spanish telecommunications giant Telefonica (NYSE:) has unveiled its financial targets for the period of 2023-26. The company is targeting a modest annual growth of 1% in revenue and 2% in EBITDA during this period. Additionally, Telefonica is planning to trim its debt, aiming to bring its net debt-to-Ebitda ratio from the current 2.62 to between 2.2 and 2.5.

In terms of dividend payouts, the company assures shareholders of at least €0.30 per share throughout the same timeframe. This commitment comes as part of Telefonica’s broader strategy to maintain its existing dividend payout level.

Despite reporting a slight revenue decrease of 0.2% to €10.32 billion in Q3, the company posted a net profit of €502 million, marking a 9.4% year-on-year increase. The company’s Q3 Oibda also rose by 2.5% to €3.33 billion, surpassing analysts’ predictions.

Telefonica’s performance over the first nine months of the year shows organic basis growth of 3.5% for revenue and 2.6% for Oibda, which aligns with the company’s set annual organic growth objectives. These figures underscore Telefonica’s commitment to steady growth and financial stability as it moves toward its goals for the next three years.

InvestingPro Insights

InvestingPro real-time data and tips offer valuable insights into Telefonica’s financial performance and outlook. According to InvestingPro, Telefonica’s revenue growth has been accelerating, and strong earnings should allow management to continue dividend payments. This aligns with the company’s commitment to maintaining its existing dividend payout level.

InvestingPro’s data further highlights Telefonica’s robust financial health. As of the second quarter of 2023, Telefonica’s market cap stood at $23.09 billion USD, with a P/E ratio of 14.5. The company also reported revenue growth of 7.0% over the last twelve months as of Q2 2023, reinforcing the company’s growth trajectory.

Additionally, Telefonica’s dividend yield was 5.96% as of the end of 2023, demonstrating the company’s strong commitment to rewarding shareholders.

These insights, along with over 10 more valuable tips, are available for further exploration on InvestingPro’s platform, helping investors make informed decisions.

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