freenet share with price plus: Goldman Sachs raises the thumb

A buy recommendation from the investment bank Goldman Sachs on Thursday temporarily sent freenet shares up 4.47 percent via XETRA to EUR 24.79.

For analyst Andrew Lee, the mobile operator is in a much better position than previously thought. It offers investors a rare combination of growth and high payouts.

The company is benefiting from rising prices in the German mobile communications market, while being well protected against cost pressure. Additional potential would arise from a business deal with 1&1. Against this background, the expert raised the price target from 19 to 30 euros and upgraded the paper twice from “sell” to “buy”.

With the price jump on Thursday, the freenet shares are again above the 21- and also above the 50-day line as indicators for the short- and medium-term trend. The price gap that opened up at the beginning of May is thus narrowing further. The papers had collapsed from 26.36 to 21.77 euros, which was only partly due to the dividend deduction of 1.57 euros.

A skeptical study by the major Swiss bank UBS put real pressure on the share price. Their analyst Polo Tang was no longer impressed by the shares, and downgraded them from “neutral” to “sell”. As a wireless discounter without its own network, the company was in danger of falling behind, Tang had argued. Because the large network operators are increasingly looking for salvation in digital and direct channels in order to avoid dealer fees. The trend towards ever larger amounts of data is also threatening to undermine the profitability of the discounter business model.

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FRANKFURT (dpa-AFX)

Image sources: freenet, JOHN MACDOUGALL/AFP/Getty Images