Upside case
Bull case
—
The bull case requires both strong earnings delivery and the market pricing TEF more generously than it does today.
Analysis OverviewBuyUpdated May 1, 2026
Telefónica, S.A. (TEF) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
20
analysts
8 bullish · 5 bearish · 20 covering TEF
Strong Buy
0
Buy
8
Hold
7
Sell
5
Strong Sell
0
Consensus Target
—
— vs today
Scenario Range
— – —
Model bear to bull value window
Coverage
20
Published analyst ratings
Valuation Context
12.5x
Forward P/E · Market cap $24.4B
TEF price targets
Three scenarios for where TEF stock could go
Current
~$4
Confidence
40 / 100
Updated
May 1, 2026
Market caseClosest to today
Base case
—
The base case reflects analyst consensus expectations — steady delivery without requiring a major catalyst or re-rating.
Stress case
Bear case
—
The bear case reflects a scenario where earnings shortfalls or multiple compression combine to materially reduce the stock from its current level.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Telefónica, S.A.
TEF · NYSECommunication ServicesTelecommunications ServicesDecember year-end
Telefónica is a multinational telecommunications company providing mobile, fixed-line, and broadband services across Europe and Latin America. It generates revenue primarily from mobile services (~50% of total), fixed-line telephony (~25%), and broadband/data services (~20%), with the remainder from wholesale and enterprise solutions. The company's moat lies in its extensive physical infrastructure—including fiber networks and mobile towers—and its established market positions in key Spanish-speaking regions.
Market Cap
$24.4B
Revenue TTM
$38.3B
Net Income TTM
-$2.1B
Net Margin
-5.5%
TEF Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
67%Exceptional
12 quarters tracked
Revenue Beat Rate
64%Exceptional
vs consensus estimates
Avg EPS Surprise
+17.2%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q2 2025
Q3 2025
Q4 2025
Q1 2026
Last 4 Quarters
EPS beats: 3 of 4Q2 2025
EPS
$0.08/$0.08
Revenue
$10.1B/$9.6B
Q3 2025
EPS
$0.08/$0.08
Revenue
$10.4B/$9.0B
Q4 2025
EPS
$0.11/$0.09
Revenue
$11.0B/$9.5B
Q1 2026
EPS
$0.06/$0.14
Revenue
—/$11.2B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q2 2025 | $0.08/$0.08 | +0.0% | $10.1B/$9.6B | +5.0% |
| Q3 2025 | $0.08/$0.08 | +0.0% | $10.4B/$9.0B | +15.0% |
| Q4 2025 | $0.11/$0.09 | +22.2% | $11.0B/$9.5B | +15.3% |
| Q1 2026 | $0.06/$0.14 | -57.1% | —/$11.2B | — |
FY1–FY2 Estimates
Revenue Outlook
FY1
$38.2B
-0.2% YoY
FY2
$38.5B
+0.9% YoY
EPS Outlook
FY1
$-0.16
+56.4% YoY
FY2
$-0.10
+39.6% YoY
Trailing FCF (TTM)$4.0B
FCF Margin: 10.5%
Next Earnings
—
Expected EPS
—
Expected Revenue
—
TEF beat EPS estimates in 3 of 4 tracked quarters. A strong delivery record supports forward estimate credibility.
TEF Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2024
Total disclosed revenue $2.2B
Product Mix
Latest annual revenue by segment or product family
Segment breakdown not available for this company.
Geographic Mix
Latest annual revenue by reported region
ARGENTINA
100.0%
+80.0% YoY
Tap, hover, or focus a slice to inspect segment detail.
ARGENTINA is the largest reported region at 100.0%, up 80.0% YoY.
TEF Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Significantly Undervalued
Fair value est. $6 — implies +37.4% from today's price.
Upside to Fair Value
37.4%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
TEF
-65.1x
vs
S&P 500
25.2x
358% discount
vs Communication Services Trailing P/E
TEF
-65.1x
vs
Communication Services
15.2x
527% discount
vs TEF 5Y Avg P/E
Today
-65.1x
vs
5Y Average
10.7x
707% discount
Forward PE
12.5x
S&P 500
19.1x
-35%
Communication Services
13.1x
-5%
5Y Avg
—
—
Trailing PE
-65.1x
S&P 500
25.2x
-358%
Communication Services
15.2x
-527%
5Y Avg
10.7x
-707%
PEG Ratio
—
S&P 500
1.74x
—
Communication Services
0.71x
—
5Y Avg
—
—
EV/EBITDA
5.2x
S&P 500
15.2x
-66%
Communication Services
8.7x
-41%
5Y Avg
4.6x
+12%
Price/FCF
4.0x
S&P 500
21.3x
-81%
Communication Services
11.6x
-66%
5Y Avg
4.3x
-8%
Price/Sales
0.5x
S&P 500
3.1x
-84%
Communication Services
1.0x
-52%
5Y Avg
0.6x
-10%
Dividend Yield
8.50%
S&P 500
1.87%
+355%
Communication Services
3.38%
+151%
5Y Avg
9.21%
-8%
| Metric | TEF | S&P 500 | Communication Services | 5Y Avg TEF |
|---|---|---|---|---|
| Forward PE | 12.5x | 19.1x-35% | 13.1x | — |
| Trailing PE | -65.1x | 25.2x-358% | 15.2x-527% | 10.7x-707% |
| PEG Ratio | — | 1.74x | 0.71x | — |
| EV/EBITDA | 5.2x | 15.2x-66% | 8.7x-41% | 4.6x+12% |
| Price/FCF | 4.0x | 21.3x-81% | 11.6x-66% | 4.3x |
| Price/Sales | 0.5x | 3.1x-84% | 1.0x-52% | 0.6x |
| Dividend Yield | 8.50% | 1.87% | 3.38% | 9.21% |
TEF trades above S&P 500 benchmarks on 0 of 5 measured multiples — appears modestly priced relative to the S&P 500 on most measures.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolTEF Financial Health
Verdict
Stressed
TEF earns 6.9% operating margin on regulated earnings, 8.5% dividend yield. Utilities carry higher leverage than industrials as a structural feature of the business model.
Regulated Operations
Revenue, regulated margins, and earnings
Revenue (TTM)
Trailing-twelve-month sales base
$38.3B
Revenue Growth
TTM vs prior year
-5.7%
Operating Margin
Operating income divided by revenue
6.9%
Net Margin
Net income divided by revenue
-5.5%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$-0.38
Operating Margin
Operating income over revenue — primary regulated earnings signal
6.9%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
2.9%
ROA
Return on assets, trailing twelve months
-2.3%
Cash & Equivalents
Liquid assets on the balance sheet
$8.1B
Net Debt
Total debt minus cash
$37.0B
Debt Serviceability
Net debt as a multiple of annual free cash flow
9.2× FCF
Regulated utilities typically operate at 3–5× net debt/FCF — this is structural, not a risk flag.
ROE
Return on equity, trailing twelve months
-9.9%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
8.5%
Dividend
8.5%
Buyback
0.0%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$0
Dividend / Share
Annualized trailing dividend per share
$0.31
Payout Ratio
Share of earnings distributed as dividends
—
Shares Outstanding
Current diluted share count
5.6B
All figures from the trailing twelve months. Utilities operate with structural leverage (3–5× net debt/FCF) due to regulated, predictable cash flows.
Open full ratios pageTEF Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 29, 2026
High Risk
High Debt Levels
Telefónica has significant debt liabilities totaling €24.3 billion due within 12 months and €51.1 billion due beyond 12 months. Its net debt stands at €30.6 billion, placing the company in a vulnerable position regarding interest rate fluctuations and financial obligations, as indicated by an Altman Z-Score of 0.93, which suggests potential financial distress.
High Risk
Liquidity Constraints
The company's current ratio is 0.85, indicating potential liquidity constraints. This ratio suggests a risk of imbalance between funding needs and available sources, which could impact Telefónica's operational capabilities.
High Risk
Regulatory Changes
Telefónica faces risks from potential changes in regulations related to net neutrality and data privacy in the EU. Such regulatory shifts can significantly impact future earnings and operational compliance costs.
Medium
Interest Rate Risk
Fluctuations in interest rates, particularly Euribor and the Brazilian SELIC rate, can directly affect Telefónica's financial costs. This exposure to interest rate changes poses a risk to the company's profitability and cash flow.
Medium
Exchange Rate Risk
Telefónica's international operations, especially in Latin America, expose it to currency fluctuations, particularly the volatility of the Brazilian Real against the Euro. This exchange rate risk can impact the company's revenue and profitability.
Medium
Market Volatility and Economic Uncertainty
Economic uncertainties in Europe and other regions where Telefónica operates can pose risks to revenue growth and overall financial stability. Such market volatility can adversely affect investor sentiment and stock performance.
Lower
Execution Risks
Telefónica faces significant execution risks associated with its new strategic plans, which some analysts consider unrealistic due to the complexities involved. Failure to effectively implement these strategies could hinder growth prospects.
Lower
Intense Competition
The telecommunications industry is characterized by intense competition, which can negatively impact Telefónica's profitability. The presence of 'over the top' services and other telecom providers adds pressure on pricing and market share.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why TEF Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 29, 2026
Efficiency and Cost Savings
Telefónica is implementing a plan to achieve €3 billion in savings by 2030, driven by modernizing its network, automating processes with AI, and shutting down its legacy copper network. This focus on efficiency is expected to reduce capital expenditure intensity to below 12.0% by 2026 and stabilize operating margins.
Strategic Pivot to Digital Services
The company is shifting its focus towards high-growth digital services through Telefónica Tech, aiming to capitalize on the growing digital landscape. This includes innovative services like smart connectivity and consumer IoT products.
Core Market Focus and Restructuring
Telefónica is simplifying its corporate structure by divesting non-core assets and focusing on key markets such as Spain, the UK, Germany, and Brazil. This strategic contraction is intended to improve the quality of earnings by reducing exposure to volatile currencies and markets.
Value Investment Potential
Some analysts view Telefónica as undervalued, citing favorable price-to-earnings (P/E) and price-to-sales (P/S) ratios compared to its industry averages. The stock's price, around $3.81-$5.03, is seen by some as a potential buying opportunity for value investors.
Dividend Reinstatement and Shareholder Returns
While the company has reset its dividends, the long-term plan aims to generate sufficient cash flow for debt reduction and potentially sustainable dividends in the future.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
TEF Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$4.33
52W Range Position
32%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$3.67
+18.0% from the low
52-Week High
$5.72
-24.3% from the high
1 Month
—
3 Month
+2.61%
YTD
+8.3%
1 Year
-15.4%
3Y CAGR
-0.4%
5Y CAGR
-2.3%
10Y CAGR
-8.5%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
TEF vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
12.5x
vs 11.1x median
+13% above peer median
Revenue Growth
-0.2%
vs +1.9% median
-110% below peer median
Net Margin
-5.5%
vs 12.4% median
-145% below peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
TEF TEF Telefónica, S.A. | $24.4B | 12.5x | -0.2% | -5.5% | Buy | — |
T T AT&T Inc. | $178.4B | 11.1x | +1.4% | 16.9% | Hold | +15.1% |
VZ VZ Verizon Communications Inc. | $200.1B | 9.6x | +2.6% | 12.4% | Hold | +8.7% |
VOD VOD Vodafone Group Public Limited Company | $37.6B | 17.9x | -6.3% | -4.1% | Buy | -28.2% |
TU TU TELUS Corporation | $20.0B | 19.5x | +3.7% | 5.4% | Buy | +76.2% |
BCE BCE BCE Inc. | $22.6B | 9.3x | +1.9% | 25.8% | Hold | +7.3% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
TEF Dividend and Capital Return
TEF returns 8.5% total yield, led by a 8.50% dividend.
Dividend UnknownFCF Well Covered
Total Shareholder Yield
8.5%
Dividend + buyback return per year
Buyback Yield
0.0%
Dividend Yield
8.50%
Payout Ratio
—
How TEF Splits Its Return
Div 8.50%
Dividend 8.50%Buybacks 0.0%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$0.31
Growth Streak
Consecutive years of dividend increases
1Y
3Y Div CAGR
3.4%
5Y Div CAGR
-5.2%
Ex-Dividend Date
—
Payment Cadence
Semi-Annual
2 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$0
Estimated Shares Retired
0
Approx. Share Reduction
0.0%
Shares Outstanding
Current diluted share count from the screening snapshot
5.6B
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2025 | $0.35 | +10.5% | — | — |
| 2024 | $0.32 | -3.9% | 0.0% | 7.8% |
| 2023 | $0.33 | +4.2% | 8.6% | 19.0% |
| 2022 | $0.32 | -21.7% | 0.0% | 4.7% |
| 2021 | $0.40 | -11.7% | 2.9% | 20.6% |
FAQ
6 questionsTEF Investor Questions
Common questions answered from live analyst data and company financials.
01Is Telefónica, S.A. (TEF) stock a buy or sell in 2026?
Telefónica, S.A. (TEF) is rated Buy by Wall Street analysts as of 2026. Of 20 analysts covering the stock, 8 rate it Buy or Strong Buy, 7 rate it Hold, and 5 rate it Sell or Strong Sell.
02Is Telefónica, S.A. (TEF) stock overvalued in 2026?
TEF trades at 12.5x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals significantly undervalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
03What are the main risks for Telefónica, S.A. (TEF) stock in 2026?
The primary risks for TEF in 2026 are: (1) High Debt Levels — Telefónica has significant debt liabilities totaling €24. (2) Liquidity Constraints — The company's current ratio is 0. (3) Regulatory Changes — Telefónica faces risks from potential changes in regulations related to net neutrality and data privacy in the EU. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
04What is Telefónica, S.A.'s revenue and earnings forecast?
Analyst consensus estimates TEF will report consensus revenue of $38.2B (-0.2% year-over-year) and EPS of $-0.16 (+56.4% year-over-year) for the upcoming fiscal year. The following year, analysts project $38.5B in revenue.
05When does Telefónica, S.A. (TEF) report its next earnings?
A confirmed upcoming earnings date for TEF is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
06How much free cash flow does Telefónica, S.A. generate?
Telefónica, S.A. (TEF) generated $4.0B in free cash flow over the trailing twelve months — a free cash flow margin of 10.5%. TEF returns capital to shareholders through dividends (8.5% yield) and share repurchases ($0 TTM).