JPM stays constructive on French telcos with or without consolidation

J.P. Morgan reiterated “overweight” ratings on Orange and Bouygues, arguing both can deliver double‑digit equity free cash flow CAGRs on a standalone basis and offering upside even if SFR is not broken up. The bank set December 2027 price targets of €62 for Bouygues and €21 for Orange, highlighting attractive EFCF yields (Bouygues ~13%, Orange ~11%) and valuation gaps versus peers. JPMorgan modelled Bouygues‑SFR synergies of €1.4bn run‑rate, a discounted NPV of €6.6bn and an implied SFR deal value of €20.5bn, while flagging XpFibre valuation and SFR debt maturities as constraints. Regulatory openness and weak French market dynamics (‑2% revenue in 2025, 4% ROCE) underpin the consolidation case and could support sector rerating, particularly boosting Bouygues’s relative appeal.