Quick Take: Telefonica 2Q26 - Solid 2Q, heading into easier 2H

Research evidence excerpt

Quick Take: Telefonica 2Q26 - Solid 2Q, heading into easier 2H

29 July 2026

Ulrich Rathe

+44 20 7762 5157

European Telecom Services ulrich.rathe@bernsteinsg.com

Telefonica SA Dan Corcuera-Robbins, ACA

+44 20 7762 5184

Rating dan.corcuera-robbins@bernsteinsg.com

Market-Perform Qingchuan Lu

Price Target +44 20 7762 1322

Qingchuan.Lu@bernsteinsg.com

TEF.SM 4.50 EUR Specialist Sales

Kiran Shah, CFA

+44 20 3547 1533

kiran.shah@bernsteinsg.com

Solid 2Q, heading into easier 2H. 2Q26 financials looked solid vs cons (revenue 0.5% vs Close Date 28 Jul 2026

cons, EBITDAaL 1.2% vs cons, FCF -0.7% vs cons). A slight revenue miss in Germany was

TEF.SM Close Price (EUR) 3.73

from low-margin handset sales, with the service revenue decline continuing at unchanged

Price Target (EUR) 4.50

rates and the margin notably surprising to the upside. FY guidance was nudged up for

Upside/(Downside) 21%

OpFCFaL and reiterated on all other items. Bottom line: TEF looks on track for the FY

52-Week Range 4.89/3.24

outlook. 2Q is the last quarter with the full headwind from the loss of 1&1’s wholesale

EDME --

business last year. Despite this headwind, German EBITDA is again slightly ahead of

FYE Dec

consensus in 2Q (as it was in 1Q), and management recently announced major headcount

Div Yield 8.1%

cuts (so far visible in high provisions in 2Q). The impact of that into 2027 may well be a

Market Cap (EUR) (M) 21,127

debating point for the call. We also think the solid KPIs in Spain deserve attention (despite

EV (EUR) (M) 59,223

heavy competition in the low end from Digi, management flags “record low churn levels”).

Performance YTD 1M 6M 12M

2Q26 headlines. Telefonica reported revenue of €8,265m (+1.7% vs cons), adj. EBITDA of Absolute (%) 6.7 2.1 10.2 (18.2)

€2,933m (+1.4% vs cons) and adj.