Reasons to question new outlook

Research evidence excerpt

Reasons to question new outlook

Deutsche Bank Group

Deutsche Numis Research

Rating Company Date

Hold Telecom Plus Plc 1 July 2026

Forecast Change

Europe

United Kingdom

Reuters Bloomberg Exchange Ticker Price at 29 Jun 2026 (GBP) 749.00

TEP.L TEP LN LSE TEP

Price Target (GBP) 700.00

Telecommunications

1,912.11 -

Wireless Services 52-week range (GBP) 710.00

Valuation & Risks

John Karidis

Our DCF-based Price Target falls 46% to 700p on much lowered forecasts Research Analyst

We believe TEP can choose to grow EPS relatively modestly but consistently every +44-20-754-54610

year with help from share buybacks. Instead, it has opted to spend materially more

each year from now on (>40% of adjusted PBT in FY26) to execute the same Key changes

business model that in the last 3+ years did not achieve the goals of TEP's new plan 1,300.00 to

TP ↓ -46.2%

(for example, despite targeted financial inducements from TEP and major macro 700.00

pressures, its Partners recruited only relatively few higher-value multi-service DB EPS (GBp) 1.28 to 0.77 ↓ -39.8%

customers). Thus, and also because we see reasons to be concerned about TEP's Source: Deutsche Bank

(not just its Partners') ability to execute, we have cut our forecasts materially. For

Price/price relative

one, our new FCFE estimates for FY27 / FY28 / FY29 are on average -54%, and

because of this and TEP's cash return policy, we expect net leverage to climb to 2.3x 3000

at YE29 and 2.9x at YE31. Thus our new DCF-based Target falls 46% to 700p/share; 2000

this is -7% vs. the stock's price now, so our rating remains Hold. 1000

2024 2025 2026

Though we have concerns about execution, we see this as largely priced in

We think there is little evidence yet to assure investors of TEP's costing of its new Telecom Plus Plc – (Rebased)

plan.