RBC Capital Markets has upgraded its investment rating on TalkTalk Telecom (LON:TALK) to outperform (from sector perform), believing the combination of the recent share price fall and the outlook for subs growth provides an opportunity for investors willing to take a 12-18 month view on the stock.
The bank added: "Backing out B2B valuation of £1.1bn puts the consumer business on a market implied EV of just c.£300/sub - very attractive in our view for a mobile operator wanting instant scale in broadband."
However, analysts did draw attention to the longer-term question marks over the company's ability to grow the business as it is squeezed by BT, Sky and the mobile operators.
Price target lifted to 225p per share from 185p.
At 3:27pm: (LON:TALK) TalkTalk Telecom Group PLC share price was +3.9p at 178.5p