Telecom operator Tele2 has strengthened its cost base and is expected to lift its EBITDA margin from approximately 40 percent to around 44 percent by 2026. Efficiency gains and previous pricing actions have contributed to this development.

At the same time, Handelsbanken considers the stock to be highly valued, while the increasingly competitive Swedish mobile market is beginning to slow down.

"An EV/EBITDA multiple of nearly 12x, a free cash flow yield below 4 percent, and a dividend yield of approximately 5 percent (based on a hiked dividend) represent a vulnerably high valuation," the bank writes, reiterating its Sell recommendation with a target price of 140 SEK.
Earlier this morning, SEB also downgraded its recommendation for Tele2 to Sell from Hold, with a target price of 172 SEK.