We believe OTE is a reliable investment for income-oriented investors, combining strong cash flow generation with a strong balance sheet that supports sustainable shareholder returns, analysts at Optima Bank write in a report reinitiating coverage of the stock.
The broker expects adjusted EBITDA AL to rise by around 3% in 2026, followed by a compound annual growth rate (CAGR) of around 2.5%.
OTE’s strong cash flow generation provides high visibility on the sustainability of shareholder returns. The regular dividend has increased at a compound annual growth rate (CAGR) of around 12% since 2022, from €0.57 per share to €0.90 per share in 2026, underscoring the company’s already strong track record of distributions.
Looking ahead, we expect strong free cash flow (FCF) generation to sustain this trend, provided capital expenditure (CapEx) remains broadly at current levels, at around €600 million, with management guiding for CapEx to peak in 2028.
Beyond its fixed-line and mobile businesses, OTE is increasingly developing its System Solutions business as a complementary source of growth. Having benefited from projects funded by the Recovery and Resilience Facility (RRF) and the digitalisation of Greece’s public sector, OTE is now seeking to leverage its expertise to expand further into private-sector projects and work for European institutions, drawing on synergies with Deutsche Telekom.
Competition in the broadband market is intensifying, particularly as PPC expands its fibre network coverage and retail presence, while satellite broadband is gaining ground in remote areas. Competition is shifting increasingly from network rollout to customer acquisition, FTTH penetration and network utilisation.
OTE has accelerated its fibre rollout, already making the service available to 2.2 million households and businesses, against a target of 3.5 million by 2030. Its approximately 730,000 active users imply a take-up rate of around 31%.
We expect the take-up rate to rise gradually to around 47% by 2030, the analysts note.
We are reinitiating coverage of the stock with a Buy rating and a target price of €22.50 per share, implying potential upside of around 15.6%, despite the share price having risen 29% over the past year, they conclude.