On Wednesday, CFRA raised its rating on shares of Orange (NYSE: ORAN) from Buy to Strong Buy, maintaining a price target of $13.00. The firm believes the valuation is justified, considering Orange's increasing stability in its geographic markets.
Orange reported a 0.9% like-for-like increase in Q2 2024 revenue, attributed to growth in retail services and a smaller decrease in wholesale services. This was partly due to higher unbundling and civil engineering rates in France during Q1.
For the six-month period ending June, Orange's EBITDA after Leases (EBITDAaL) grew by 2.6%, totaling EUR 5,511 million, aligning with CFRA's expectations. Despite this performance, Orange's shares experienced a decline along with the broader French market.
The company announced a 2024 dividend per share (DPS) of EUR 0.75, which translates to an attractive yield of over 7% at the current share price. CFRA's upgrade to a Strong Buy rating comes after a share price drop, which the firm views as an opportunity due to the shares being more attractively priced following geopolitical tensions.
InvestingPro Insights
Orange (NYSE: ORAN) appears to be capturing the attention of investors looking for value and stability in their portfolios. According to recent metrics, Orange boasts a market capitalization of $29.46 billion and trades at a P/E ratio of 11.98, which is further underscored by a lower adjusted P/E ratio of 10.29 for the last twelve months as of Q4 2023. This suggests that the stock is trading at a low price relative to its near-term earnings growth, an insight that aligns with CFRA's positive outlook on the company.
The InvestingPro Tips highlight Orange's high shareholder yield and significant dividend payments, which have been maintained for 21 consecutive years. With a dividend yield of 6.58% as of mid-2024, Orange stands out as a substantial income-generating investment. Moreover, the company is also seen as a prominent player in the Diversified Telecommunication Services industry, which could provide a degree of resilience amidst market fluctuations.
Investors considering Orange may find additional InvestingPro Tips, such as the company's strong free cash flow yield and the analysts' expectations of profitability this year, to be compelling reasons to look closer at the stock. For those interested in unlocking the full suite of insights, using the coupon code PRONEWS24 can get them up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro.
It is worth noting that Orange is not without its challenges, with analysts anticipating a sales decline in the current year. Nonetheless, the overall financial health of the company, including a solid gross profit margin of 37.8% in the last twelve months as of Q4 2023, paints a picture of a business that is managing to navigate its market effectively. With 10 additional InvestingPro Tips available, investors have ample resources to make a well-informed decision on whether Orange fits into their investment strategy.
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