10 Best Italian Stocks To Buy Now

04. Telecom Italia S.p.A. (OTC:TIIAY)

Upside Potential: 29.60%

Latest Average Share Price Target: $3.48

Telecom Italia S.p.A. (OTC:TIIAY) stands out as one of the best Italian stocks to buy now due to its robust financial performance and strategic initiatives, which have transformed the company’s capital structure and operating efficiency. The firm’s recent developments, including the successful sale of NetCo to KKR, have significantly deleveraged the business and positioned it for sustainable growth. With a renewed focus on its domestic and Brazilian operations, Telecom Italia has managed to strengthen its balance sheet, optimize cash flow, and reinforce its position in the competitive telecom industry.

In the first half of 2024, Telecom Italia S.p.A. (OTC:TIIAY) reported strong financial results, surpassing its guidance and reflecting solid performance across key segments. The group’s total revenues grew by 3.5% year-over-year, while domestic revenues increased by 1.6%, demonstrating resilience in the face of intense market competition. The company’s EBITDA after lease also saw a double-digit increase, primarily driven by outstanding growth in Brazil and steady performance in the Italian market. The successful execution of its transformation plan has resulted in over EUR 100 million in EBITDA savings, showcasing the company’s operational efficiency.

The company’s strategic focus on TIM Enterprise and TIM Brazil as growth engines is paying off. TIM Enterprise’s revenue increased by 5% year-over-year, supported by strong demand in cloud and security services, which saw growth of nearly 20%. This has enabled Telecom Italia S.p.A. (OTC:TIIAY) to secure a leadership position in the National Strategic Hub for cloud services in Italy, with increasing interest from private sector clients.

In addition, the sale of NetCo has led to a significant net debt reduction of EUR 13.8 billion, lowering the company’s leverage ratio and improving its credit profile. With a renewed capital structure, Telecom Italia S.p.A. (OTC:TIIAY) is better positioned to pursue long-term growth opportunities. The company’s outlook for the second half remains positive, supported by favorable seasonality, price increases, and continued momentum in its cloud and connectivity segments.

Overall, Telecom Italia S.p.A. (OTC:TIIAY) solid financial performance, strategic realignment, and focus on growth areas make it an attractive investment option for those seeking exposure to the Italian stock market. The company’s ability to adapt and transform amidst challenging conditions highlights its potential for sustained value creation in the future.