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Is Tele2 (OM:TEL2 B) Fairly Priced? A Fresh Look at Valuation After Recent Share Gains

Simply Wall St · 09/10/2025 12:34

If you have been keeping an eye on Tele2 (OM:TEL2 B), you might have noticed some recent moves in the stock that are starting to catch investor attention. Even without a headline-making event to drive the price shift, this latest momentum has some investors asking whether something significant is developing behind the scenes. Whenever market sentiment shifts, it is worth pausing to assess what might be unfolding and whether the company could offer value at current levels.

Looking at recent performance, Tele2 has seen its stock climb about 19% over the past three months, building on a 48% total return over the past year and nearly doubling over three years. That kind of steady upward movement is hard to ignore and suggests momentum has picked up compared to previous years. At the same time, there have been small but consistent revenue and net income gains, though the market seems to be weighing these trends against expectations for future growth.

With this positive trend in mind, is Tele2's current share price offering investors a real bargain, or has the market already factored in all of the company’s future growth potential?

Most Popular Narrative: 9.9% Overvalued

According to the most widely followed narrative, Tele2's current share price is viewed as overvalued, with a fair value estimate that sits moderately below the present trading level. Analysts see near-term optimism and operational momentum, but overall expect the share price to normalize closer to consensus targets.

“Tele2 is well positioned to benefit from robust demand for broadband and mobile connectivity, as ongoing digitalization and remote/hybrid work continue to drive higher data consumption in both consumer and enterprise segments. This trend supports sustained end-user service revenue growth, notably demonstrated by double-digit growth rates in Baltics and B2B Sweden.”

Curious what’s really behind this premium? The narrative’s bold projections and strict assumptions about future margins and earnings could hold surprises for even the most seasoned investor. Want to know which numbers, growth levers, and industry dynamics are shaping this contentious fair value? Dig into the full rationale and see the assumptions that may decide Tele2’s next big move.

Result: Fair Value of SEK152.14 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying competition or delays in regulatory action could quickly challenge the current optimism and lead to sharp adjustments in Tele2’s outlook.

Find out about the key risks to this Tele2 narrative.

Another View: SWS DCF Model Says Undervalued

While the current analyst target sees Tele2 as overvalued based on future growth estimates, our DCF model takes a different approach and suggests the stock is actually undervalued. Could this model reveal overlooked upside?

Look into how the SWS DCF model arrives at its fair value.
TEL2 B Discounted Cash Flow as at Sep 2025
TEL2 B Discounted Cash Flow as at Sep 2025
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Tele2 for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Tele2 Narrative

If you want to interpret the numbers differently, explore the finer points, or develop your own perspective, you can have a narrative ready in just a few minutes. Do it your way.

A great starting point for your Tele2 research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.