Bernstein Downgrades Deutsche Telekom, Names BT Top European Telecom Pick

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Summary · why it matters

Bernstein downgraded Deutsche Telekom to market-perform from outperform and cut its price target to €28.10 from €37, citing uncertainty around a possible merger with T-Mobile US, intensifying competition in German fixed-line broadband and a neutral view on T-Mobile US from its U.S. team. The brokerage said a potential outright combination with T-Mobile US would give Deutsche Telekom full exposure to the U.S. operator's growth prospects, but questioned whether the transaction would generate sufficient industrial synergies to justify the deal. Bernstein estimated that a takeover involving a 20% premium for T-Mobile US minority shareholders would dilute Deutsche Telekom shareholders by about 11%, and flagged potential flow-back pressure as former T-Mobile US shareholders would own about 42% of the combined company. The possible deal adds to existing concerns around Deutsche Telekom's German business, where Bernstein said German broadband revenue growth had slowed to 1.7% year-on-year in the first half of 2026 from 4.5% in the second half of 2023. Bernstein's U.S. team rates T-Mobile US market-perform with a $220 price target, while for BT the brokerage retained its outperform rating, raised its price target to 235 pence from 230 pence and named the British telecom operator its top pick among European telecom stocks. Elsewhere in the sector, Bernstein downgraded Tele2 to market-perform from outperform on valuation with a price target of 166 Swedish krona, and retained underperform ratings on Telia and Elisa.

Impact on assets 8

Cloud & Digital Infrastructure± Mixed · 6 stocks
Deutsche Telekom AG
DTE
▼ NegativeCapitalCompetitionrelevance

Bernstein downgraded Deutsche Telekom to market-perform and cut its price target to €28.10 from €37.

BT Group Plc
BT-A
▲ PositiveCapitalrelevance

Bernstein kept BT at outperform, raised its price target to 235p from 230p and named it top European telecom pick.

Elisa Oyj
0I8Y
▼ NegativeCapitalrelevance

Bernstein retained its underperform rating on Elisa.

T-Mobile US Inc
TMUS
± MixedCapitalrelevance

Bernstein's U.S. team rates T-Mobile US market-perform with a $220 target, and a possible DT combination would dilute DT holders and create flow-back pressure.

Energy Transition & Power Demand▲ · 1 stocks
Others▼ · 1 stocks
Tele2 AB (publ)
TLTZF
▼ NegativeCapitalrelevance

Bernstein downgraded Tele2 to market-perform from outperform on valuation with a 166 SEK price target.

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