Telecom Argentina initiated with a Sell at Goldman Sachs

Goldman Sachs analyst Vitor Tomita initiated coverage of Telecom Argentina (TEO) with a Sell rating and $7.30 price target which represents 10% downside. Telecom Argentina is an integrated telecom operator with premium positioning in Argentina’s relatively consolidated mobile market and a leading position in fixed broadband, the analyst tells investors in a research note. The firm expects the company’s profitability gains to be unlocked only gradually, with the company’s defensive nature also “somewhat limiting” revenue growth upside in a scenario of macro recovery. It also sees lingering risks in fixed broadband competition and Telecom’s debt position.