Citigroup Downgrades Partner Communications to Sell

Citigroup lowers its rating on Partner Communications PTNR to Sell from Buy as it says it overestimated business fundamentals when it upgraded the company previously. Citigroup notes, "We erred in upgrading Partner to Buy in August. Prices of service contracts have stabilized, but we underestimated the drag on future ARPU from high smartphone rebates given in 9M11 and the time it would take for higher ARPU customers to migrate to lower ARPU packages. Two new network operators from mid-year should put further pressure on prices. We forecast a further NIS7-8 fall in ARPU in 2012 from the above." PTNR closed at $8.39 a share on Tuesday.