Globes 31-7-2012

Harel Finance downgrades Bezeq
Harel Finance cuts its recommendation for Bezeq to Market perform” and cut its target price to NIS 4.70, citing expected weak results in its core businesses.
31 July 12 12:08, Nadav

Harel Finance Ltd. today jumped on the bandwagon of cutting the target price for Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ), because of weak results, two days before the company publishes its financial report for the second quarter. Harel Finance analyst Rami Rosen expects Bezeq to report a net profit of NIS 423 million on NIS 2.54 billion revenue for the quarter. It expects mobile subsidiary Pelephone Communications Ltd. to show a further erosion in profitability and weak results by DBS Satellite Services (1998) Ltd. (YES).
Rosen says, “Ahead of the financial report, we are updating our long-term profit forecasts. We believe that the events taking place in the telecommunications industry will affect Bezeq in core businesses in the coming years: landline, further decline in mobile operations through Pelephone, and, of course, multichannel television.”
Rosen continued, “Following the update of the model, and expected blows to various business sectors, we are cutting our recommendation for the share from “Outperform” to “Market perform” and we’re cutting our target price from NIS 6.70 to NIS 4.70. We continue to believe that the telecommunications industry will underperform in the coming quarters. However, we argue that Bezeq continues to be the best alternative for investors interested in exposure to the industry.”
Yesterday, IBI Investment House Ltd. cut its target price for Bezeq from NIS 6.10 to NIS 5, and reiterated its “Neutral” recommendation, in view of expected poor financial reports.
Bezeq’s share price fell 1.1% in morning trading today to NIS 4.05, giving a market cap of NIS 11.1 billion.
Published by Globes [online], Israel business news – www.globes-online.com – on July 31, 2012