Tiscali downgraded to "under perform"

01/29/03 - BNP Paribas

NEW YORK, January 29 (New Ratings) – Analyst Alexandra Lord of BNP Paribas downgrades Tiscali from "neutral" to "under perform." The target price is set to €4.20.

Shares of Tiscali, an Italian internet services’ provider, are currently trading near the target price of €4.28.

According to BNP Paribas’ research note, Tiscali’s FY02 results, expected for February, are likely to be below estimates for EBITDA and revenues. Tiscali’s troubles are compounded by a decimating market share and an EBTIDA loss of €15.40 million, says the analyst.

The analyst observes that Tiscali’s balance sheet is rendered unstable by its €70 million capital expenditure and debts. The company’s diffused strategic focus, owing to an expansive European network, is also seen by the analyst as a risk factor.

The EPS estimates for 2002, 2003 and 2004 are -€0.38, -€0.03 and €0.15, respectively. The P/E estimate for 2004 is 29.2x.

BNP Paribas downgrades Tiscali from "neutral" to "under perform."