Morgan Stanley on Monday upgraded its opinion on Orange shares from 'in-line weighting' to 'overweight', while raising its price target from €12.5 to €14.

The analyst believes that the mobile telephony group is in a position to increase its free cash flow (FCF) by more than 10% a year, not only by reducing its capital expenditure, but also by improving its operating profit.

However, Morgan Stanley points out that it has identified a strong correlation between the operator's share price and its ability to generate cash, with the period of weakening FCF in 2010-2019 coinciding with a weakening in its stock market performance.

The financial intermediary stresses that the operator is also exposed to other themes that it considers to be promising, such as possible mergers in France or Spain, a change in its management team and a simplification of its organizational structure.

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