Orange Has Juice: A Pending Masmovil Deal Is 'Most Anticipated Event This Year,' Analyst Says

Shares of Orange SA ORAN were rising in early trading on Wednesday.

The stock is among the few in the wider European telecom sector that captures all the elements that investors favor, including “improving competitive trends; a path to lower investment needs; in-market consolidation opportunities; infra ownership; and a route to growing dividend returns,” according to BofA Securities.

The Orange Analyst: Titus Krahn upgraded the rating for Orange from Underperform to Buy, while raising the price target from €8.80 ($9.23) to €13.00 ($13.64).

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The Orange Thesis: A stabilizing domestic market and a head-start in fiber roll-out has upside potential for the company, Krahn said in the upgrade note.

“Orange is operating in an improving domestic market (although still competitive) with growth engines abroad,” the analyst wrote.

A pending deal with private equity-backed Masmovil Ibercom SA is also something investors must consider.

“Orange is a play on possible (much-needed) consolidation in the European telecom sector as the Spanish merger review with Masmovil could turn out to be the industry’s most anticipated event this year (decision expected by year-end),” Krahn added.

ORAN Price Action: Shares of Orange had risen by 2.04% to $11.52 at the time of publication Wednesday.

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