J.P. Morgan has moved to an underweight recommendation on Elisa, downgrading the Finnish telecom operator from neutral and keeping its December 2027 price target unchanged at €39. The unchanged target implies about 10% downside from Elisa's March 26 closing share price of €43.50.
The brokerage's reassessment is grounded in a view that mobile service revenue growth will face pressure as higher customer churn in the back half of 2025 filters into early 2026. J.P. Morgan now expects mobile revenue growth to decelerate to 1.5% year-on-year in the first half of 2026, down from 2.9% in the second half of 2025.
J.P. Morgan pointed to elevated churn levels recorded through 2025 as a key driver of this outlook. Reported churn climbed to 22% in the third quarter and 23% in the fourth quarter of 2025, rates the brokerage says sit above historical averages. These rises coincided with increased competitive intensity after the market entry of mobile virtual network operators Giga Mobiili and Oomi Mobiili.
The analysts highlighted a notable pricing gap between Elisa and the new MVNO entrants. According to the brokerage, Elisa remains the most expensive operator in Finland while MVNO offerings are on average more than 20% cheaper, contributing to an intensified pricing environment and upward pressure on churn.
Drawing a parallel to an earlier competitive cycle in 2017-2018, J.P. Morgan warned that the current elevated churn could presage a prolonged slowdown in revenue growth similar to that episode. On profitability and cash generation, the bank forecasts Elisa's earnings per share to grow at a compound annual rate of 3% over 2025-2028, well below the sector average projection of 8%. J.P. Morgan also expects free cash flow growth at Elisa to be essentially flat over the period.
Against this backdrop, the brokerage concluded that Elisa's valuation premium to peers is no longer supported by the company's weakening fundamentals.
By contrast, J.P. Morgan retained an overweight stance on Sweden's Telia and Tele2, and kept a neutral rating on Norway's Telenor, framing the Swedish operators as better positioned to deliver shareholder returns.
For Telia, the brokerage flagged the potential for multi-year share buybacks if the company re-levers toward the lower end of its stated target range, estimating that total shareholder return yields could rise to around 11% by 2030 in an upside scenario.
Tele2 has, in J.P. Morgan's view, lifted investor expectations after increasing its dividend payout above 100% of free cash flow. The bank anticipates dividend growth of about 20% in 2026 for Tele2 and places potential total shareholder returns in a bullish case at up to 13% by 2030.
Telenor was described as fairly valued. J.P. Morgan noted the company's ongoing buyback programme, which is being funded by asset sales, alongside a modest growth outlook.
Across the four Nordic operators covered, the brokerage's base-case modelling points to 2030 total shareholder return yields in the 7%-11% range, with upside driven by higher leverage and increased capital returns.
These sector-level distinctions informed J.P. Morgan's relative ratings: a downgrade for Elisa based on weakening domestic fundamentals and intact overweight calls for Telia and Tele2 based on balance sheet flexibility and clearer pathways to shareholder returns.