Shares in Telecom Italia rise more than 4 percent to a two-week high as Goldman Sachs adds the stock to its 'Conviction Buy List', saying it sees the group as a key beneficiary of an expected consolidation in the telecoms industry.
The U.S. investment bank raises its target price on the stock to 1.50 euros from 0.95 euros, saying that the current valuation does not reflect the potential for consolidation benefits across the company's key Italy and Brazil markets, as well as in Europe.
In a research note, Goldman Sachs says the rise incorporates "the potential for passive benefits from double (fixed and mobile) consolidation in Italy, synergies from a disposal of TIM Brasil, and a 10 percent weighting for Pan-Europe M&A (mergers and acquisitions)".
By 0734 GMT, Telecom Italia shares are up 4.1 percent at 0.907 euros, outpacing a 0.15 percent rise in Europe's telecoms index.
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