Telecom Italia's Rating Agencies See the Prize, But the Market Is Still Squinting
Published on 08/11/2026 at 16:24 | Redaktion boerse-global.de
The board's unanimous blessing of Poste Italiane's voluntary exchange offer was never going to be the end of the story for Telecom Italia—it was merely the starting gun. Yet as the Italian telecom operator's shares hover near €7.49, barely budging from the prior session, the disconnect between what credit analysts are signaling and what equity traders are pricing has rarely been starker.
The Credit Story Is Improving, Whether the Stock Cares or Not
Moody's moved swiftly after the board vote, placing Telecom Italia's Ba1 rating under review for a possible upgrade, with a decision expected in August 2026. Fitch had already done its part in May, lifting the long-term issuer rating from "BB" to "BB+" with a stable outlook, citing the fixed-line network sale and the resulting debt reduction. Now, with the rating agencies effectively lining up behind the Poste transaction, the question is no longer whether the credit profile is improving—it clearly is—but whether minority shareholders will deliver the tender acceptances needed to make the whole exercise worthwhile.
The market's skepticism is quantifiable. The stock is down 6.63 percent over the past 30 days, with annual volatility hovering near 15 percent. A recent session saw the shares dip 1.24 percent to €7.50, a move that suggests the positive rating signals have yet to translate into sustained buying pressure.
A Return to Profit Gives the Agencies Their Ammunition
The improving credit narrative isn't built on hope alone. Telecom Italia's first-half results, released on Thursday, showed revenues of €6.83 billion and EBITDA after leasing up 1.2 percent. The company also confirmed receipt of a €1 billion reimbursement related to a 1998 license fee and maintained its guidance for 2026 and 2027.
The second quarter told a similar story: revenue growth of 2.0 percent to €6.8 billion, a net profit attributable to shareholders of €88 million—a swing from the loss recorded in the same period a year earlier—and EBITDA after leasing of €998 million, which met analyst expectations. Free equity cash flow after leasing for the first half came in at €0.7 billion. This combination of returning to profitability and holding the annual forecast gives the rating agencies a fundamental foundation for their newfound optimism.
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What a Successful Deal Would Unlock
Moody's has sketched out the potential upside: a successful transaction could lift the Ba1 rating by one to two notches, building on the already-improved "BB+" from Fitch. Beyond the credit metrics, there are operational arguments. Poste Italiane brings a dense national distribution network and digital services that could mesh with Telecom Italia's mobile and fixed-line operations to create genuine commercial synergies.
The technical indicators suggest the market hasn't fully embraced this scenario. The relative strength index sits at 59.1, a neutral reading that implies investors are not yet pricing in the full upside of a successful deal. With a market capitalization of €16.20 billion, there is theoretical room for the shares to re-rate—provided the offer goes through.
The Bear Case Has Its Own Evidence
Skepticism isn't unfounded. If a substantial block of minority shareholders rejects the offer, the entire transaction could collapse, and the recent positive rating reviews would likely be withdrawn. There's also a legal overhang unrelated to the Poste bid: Telecom Italia is locked in a dispute with tower operator INWIT over the termination of a service agreement. Without a negotiated settlement, that litigation could complicate the company's cost-reduction programs regardless of how the tender offer plays out.
Insider activity has added another layer of caution. Media reports indicate that executives and insiders sold shares on both August 3 and August 4, transactions that market watchers tend to scrutinize closely during a live takeover situation, even if they don't necessarily predict the outcome. Equita SIM also downgraded the stock to "Hold" on August 3, a call that fits the broader picture of a share price losing short-term momentum despite operational progress.
The September Window Becomes the Deciding Chapter
The tender offer remains the dominant driver for Telecom Italia's shares through at least the third quarter of 2026. As long as the stock stabilizes near its recent closing level of €7.50, the positive rating reviews should act as a floor under investor sentiment. But early acceptance data will tell the real story. If the numbers suggest the offer is stalling, selling pressure could resume—the prospect of a rating upgrade would fade along with the deal.
The next concrete milestone is the official close of the acceptance window, expected in September 2026. A favorable outcome there would cement both the credit story and the long-term valuation case. A failure would leave Telecom Italia exactly where it started: carrying its existing debt load, its current credit profile, and a market that never quite believed the upgrade was coming.
