Superloop Ltd (ASX: SLC) and Aussie Broadband Ltd (ASX: ABB) are both Australian telecommunications companies with a lust for growth through acquisitions. Their shares have both seen robust growth over the past 6 months, thanks to solid financial results and expanding customer bases.
At the time of writing, Aussie Broadband shares are in deficit, down 2.82% for the day at $5 a piece. Today's decline means the shares are now 14.62% lower over the month and 16% lower than their 3.5-year peak in late October. Thanks to huge gains over the past 6 months, Aussie Broadband shares are still 37.98% higher over the year.
Superloop shares are also trading in the red this afternoon. At the time of writing, the shares are 5.17% lower for the day, trading at $2.30 each. The decline has pushed the shares 29.82% lower over the month, but they're still 11.71% higher over the year, again, mostly owing to strong gains since May.
In a new note to investors this morning, analysts at Macquarie Group Ltd (ASX: MQG) have updated their outlook on the two shares. And there is one clear winner.
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Macquarie's take on Aussie Broadband shares
The broker has lowered its outlook on Aussie Broadband shares to neutral, from outperform. It has also cut its 12-month price target on the stock by 20% to $5.10, from $6.35 previously.
At the time of writing, the revised price target implies a potential 2% upside for investors over the next 12 months.
"Our ABB target price cut of -20% reflects: 1) EPS Change: Revisions of -3% in FY26E, -7% in FY27E, -9% in FY28E…. 2) DCF: Beta increase from 1 to 1.2, reflecting increased potential volatility from pricing changes if OPT/TPG/Vodafone also lower prices, or TLS continues to lower prices further…. 3) PE-Rel Valuation: P/E Multiple used to value the business reduced from 37x NTM P/E to 30x P/E on NTM earnings, which represents a decrease to only +10% above its historical Long-Run Average P/E Relative to the ASX300," the broker said in its note.
"Our rating change to Neutral reflects a lower TSR (0%), given our target price change."
Macquarie's take on Superloop shares
Macquarie analysts have, however, maintained their outperform rating on Superloop shares, putting the telco as the favourite. The target price was also reduced by 7% to $3.30, down from $3.55 previously.
At the time of writing, this represents a potential 43.5% upside for investors over the next 12 months.
"Our SLC target price cut of -7%, reflects: 1) EPS Changes: Our EPS changes (-4% in FY26E & FY27E, -3% in FY28E) reflect a moderation in our estimates for Users growth in SLC's Consumer business…. 2) DCF: Beta increase from 1.05 to 1.15, reflecting increased potential volatility from competitor pricing moves," Macquarie analysts explained in the note.
