Abstract
Neuf Cegetel recent proactivity in external growth is not fully valued at current share price, which should also better reflect organic opportunities, leading to a 14% upside. Synergies are not fully valued Recent operations (merger with Cegetel, IPO, acquisition of AOL internet subscribers base) currently delivers synergies (headcount, SG&A, lower access costs, less competition) EBITDA margins remain below those of peer companies Neuf Cegetel model should finally yeld major cash flows in the short term Margins should also improve through migration from DSL wholesale to LLU Well positionned to capture growth opportunities Current businesses are on the rise till the end of the decade ( and provide strong cash flows) FTTH race has begun, needing capex but also previsible and high returns Neuf mobile model appears to be successful, to be confirmed in 2007 We therefore conclude to a 12 months price target of EUR32,0, leading to a 14% upside.
