TLS -- TPM

TPG - TPG TELECOM LIMITED

UBS ratesTPG as Downgrade to Sell from Neutral (5) - UBS thinks TPG Telecom’s shareprice has not fully adjusted for the special dividend payment.

Thestock appears to be trading at a premium to Telstra which UBS considers fairgiven that synergies will take time to achieve and the broker expects moregrowth from TPG in the near term.

Evenso, the broker believes the magnitude of the premium is excessive. Valuationremains highly dependent on synergy assumptions.

UBSdowngrades its rating to Sell from Neutral with its target price decreasing to$7.20 from $8.

Targetprice is $7.20 Current Price is $8.24 Difference: minus $1.04 (current price isover target). If TPG meets the UBS target it will return approximately minus13% (excluding dividends, fees and charges - negative figures indicate anexpected loss). Current consensus price target is $8.49, suggesting upside of3.0%(ex-dividends)The company's fiscal year ends in December.

Forecastfor FY20:

UBSforecasts a full year FY20 dividend of 10.00 cents and EPS of 2.00 cents .Atthe last closing share price the estimated dividend yield is 1.21%. At the lastclosing share price the stock's estimated Price to Earnings Ratio (PER) is412.00. How do these forecasts compare to market consensus projections?

Currentconsensus EPS estimate is 16.8, implying annual growth of -10.2%.Currentconsensus DPS estimate is 6.1, implying a prospective dividend yield of 0.7%.Currentconsensus EPS estimate suggests the PER is 49.0.Forecast for FY21:

UBSforecasts a full year FY21 dividend of 17.00 cents and EPS of 18.00 cents .Atthe last closing share price the estimated dividend yield is 2.06%. At the lastclosing share price the stock's estimated Price to Earnings Ratio (PER) is45.78. How do these forecasts compare to market consensus projections?

Currentconsensus EPS estimate is 21.4, implying annual growth of 27.4%.Currentconsensus DPS estimate is 15.9, implying a prospective dividend yield of1.9%.Current consensus EPS estimate suggests the PER is 38.5.Market Sentiment:0.1All consensus data are updated until yesterday. FNArena's consensuscalculations require a minimum of three sources