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Investing.com -- Shares in Orange SA rose more than 3% on Monday, briefly topping Morgan Stanley’s price target for the French telecoms group, after the company beat first-half earnings forecasts and raised its full-year cash flow guidance for the second time this year.
The stock touched an intraday high of €17.19 in Paris morning trade, eclipsing Morgan Stanley’s €16.50 price target and tracking toward the upper end of the broker’s expected 1%-3% move.
"MEA strength and the guidance raise outweighing Spanish weakness," Morgan Stanley analysts said, maintaining their “equal-weight” rating.
Orange now expects 2026 EBITDAaL growth to exceed 4%, up from a prior forecast of above 3%, and lifted its organic cash flow target by 7.5% to around €4.3 billion, a figure the company said sits 4.2% above its own compiled consensus.
First-half revenue of €20.95 billion and EBITDAaL of €6.13 billion both came in above analysts’ average estimates of €20.76 billion and €6.11 billion respectively, driven by record growth in Africa and the Middle East, where second-quarter revenue jumped 15% year-on-year.
Morgan Stanley said the Q2 EBITDAaL beat, running over 60 basis points above consensus, was "more organic / sustainable in nature" than the Q1 beat, which had been flattered by around €100 million of exceptional items and fibre co-financing in France.
The group’s EBITDAaL growth remained resilient, following increases of 3.9% in the fourth quarter of 2025, 6.6% in the first quarter of 2026 and 3.9% in the second quarter.
France delivered a modest upside surprise, with second-quarter revenue rising 0.1% against Morgan Stanley’s forecast for a 1% decline. However, the broker said underlying first-half growth, excluding one-off wholesale effects, was flat and below the company’s full-year target.
Spain remained the weak spot. Service revenue at MasOrange, which Orange consolidated after acquiring Lorca’s 50% stake in June, fell 2%, while first-half EBITDAaL declined 3%. The company expects performance to improve in the second half.
First-half net income surged to €3.6 billion, boosted by a €2.4 billion accounting gain from the MasOrange consolidation and the reversal of a prior-year restructuring provision. Adjusted net income rose 11.8% to €1.35 billion.
Net financial debt increased to €35.7 billion from €22.5 billion at the end of 2025, largely reflecting the MasOrange acquisition, lifting the net debt-to-EBITDAaL ratio to 2.4 times.
"This semester marks a significant milestone in the execution of our ’Trust the future’ strategic plan," chief executive Christel Heydemann said in a statement.
"With the acquisition of MasOrange and the signing of the memorandum of understanding for the joint acquisition of SFR, we have achieved two major milestones in our consolidation strategy in Europe."
Orange set a 2026 dividend of €0.79 per share, payable in 2027, subject to shareholder approval.
