TalkTalk jumps on Exane upgrade

3rd Sep 2015 13:37

(ShareCast News) - TalkTalk pushed higher after Exane BNP Paribas upgraded the stock to 'neutral' from 'underperform' and lifted its price target to 260p from 210p to reflect the potential for improved news flow through the second quarter after the recent sharp de-rating.The bank said that while it continues to believe TalkTalk's business is fundamentally challenged, the sharp underperformance in recent weeks has partially reduced the valuation anomaly. It added that news flow over the next six months is likely to be far more supportive.It said greater regulatory intervention at Openreach would be taken positively, while progress on the York FTTH trial - specifically news of early customer adoption - could reignite interest in the potential of the CityFibre joint venture.It said that where Ofcom's review of BT is concerned, the likely outcome would be a compromise involving more hands-on regulation of an integrated BT."That said the risk that Ofcom decides to pursue a breakup of BT is greater than many believe. We see clear scope for a regulatory shock in this respect," said Exane, adding: "What's bad for BT is generally good for its competitors."At 1337 BST, TalkTalk shares were up 3.1% at 298.80p.