The analyst confirms his Neutral recommendation on the stock, with an unchanged target price of E3.9, representing 5% upside potential compared with the current price.

UBS considers the stock to be cheap but dynamically complex.

Telefonica offers defensive FCF growth at an attractive valuation, but with uncertain results due to the various transactions announced in Spain and other risks, says UBS.

The Spanish telecom operator now expects organic sales growth of 4% this year, double its previous forecast. It also expects EBITDA to grow organically by 3%, at the top end of the range it communicated to the market at the beginning of the year.

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