June 20 (Reuters) - Goldman Sachs upgraded Saudi Arabia’s Etihad Etisalat Co (Mobily) to “buy” from “neutral” citing a four-fold increase in its mobile broadband subscriber base last year.
The brokerage expects Mobily, Saudi Arabia’s second-largest telecoms operator by market capitalization, to benefit from faster mobile data adoption, superior network quality, and strong consumption trends in the country.
It expects Mobily to sustain its superior returns and raised its price target on the stock to 87 Saudi riyals ($23.20) from 58.8 Saudi riyals ($15.68).
Goldman also upgraded landline operator Turk Telekom to “buy” as it expects the company to sustain growth and returns due to its superior positioning in a benign fixed-line and broadband market in Turkey.
It upgraded Zain to “neutral” but expects the Kuwaiti telco to continue to experience execution difficulties in its major markets such as Kuwait, Iraq, and Sudan.
Goldman raised targets on African companies such as MTN Group, Vodacom and media group Naspers Ltd as it expects high growth and cash-flow generation potential for companies exposed to fast-growing African economies.
Goldman cut price targets on several other telecoms companies in Central Eastern Europe, Middle East and Africa saying in a volatile macro environment there will be a greater dispersion in valuation multiples for companies depending on their industry positioning and earnings visibility. ($1 = 3.7505 Saudi riyals) (Reporting by Eileen Anupa Soreng in Bangalore; Editing by Supriya Kurane)