Phone still looking for your path in soil stock exchange after falling recently below the barrier of 3 euros per share.
Their business results in the period between January and September of 2020 -known at the end of the month of October-, added to the valuation obtained by the part of banking entities, will be the point of support of the ‘teleco’ Spanish to stay afloat on the stock exchange in the remainder of the year.
The company continues to dealing with a bearish trend in the long term, unlike other competitors, is not getting rolled back. Despite the fact that recently has been viewed positively by institutions such as Barclays or Credit Suisse -with beneficial results in terms of revenue and operating profit-the consolidation of the price above the € 3 it seems to resist.
The negative effect of the Covid-19 on the net profit, as well as the impact of the currency devaluation in Latin america -where the company has a strong presence-are the counterweight to what is observed in their results from January to September of 2020.
Phone still subjected to a high level of leverage -its debt ratio is encrypted by almost 272%- and his margin of net profit is still very small (1,78%), which is not at all attractive despite the narrowing between its price in the stock exchange and the theoretical (encryption in 1.33 euros).
At the technical level, the bearish trend in the long term is shaping up as the next barrier to beat if you manage to overcome the level of 3 euros per share. Of franquearla, it should face resistance in the 3,1350 euros.
On the contrary, in case of failure of the bullish move and continue the price drop, this would face to their levels located between the 2,7550 and 2,8620 euros.
***Álvaro Giménez-Cuenca is analyst XTB.