Morgan Stanley | We reviewed the European telecoms sector where we thought, confronted by an environment where there have been numerous profit warnings in the global technology sector (Ericsson, Hexagone, Netflix, Software AG, Tieto), together with our global recommendation downgrade from RV to UW, that the telecoms are well positioned to offer a better performance than seen in Q418.
The telecoms have a strong inverse correlation with the technology sector and the performance of the markets, as we saw especially in the last three months of 2018 following the sharp falls in the markets (especially the technology sector) and the good performance on the other hand of the telecoms. Our favourites are Cellnex, KPN, Masmovil and Telefonica.
