Telecom Italia S.p.A.
Thesis
Telecom Italia's stock is currently priced at €1.08, but we believe it is worth at least €1.50 due to its potential for high-margin revenue growth and the value of its 67% stake in TIM Participações in Brazil, which will become more valuable upon consolidation in the Brazilian telecom market.
Did it work?
The pitch was long Telecom Italia at €1.08 with a target of at least €1.50 (~39% upside) predicated on high-margin revenue growth and value crystallization from the 67% TIM Participações stake upon Brazilian market consolidation. Instead, the stock has declined 11%, moving directly against the thesis direction and roughly 50 percentage points short of the stated target. While the time elapsed is unknown and the thesis cited no explicit horizon, the negative return shows the expected catalysts have not translated into price appreciation, so the thesis has not played out.