Tele2 has been downgraded by UBS from neutral to sell, with the target price being reduced from SEK 104 to SEK 102. The downgrade is due to concerns about the company's declining momentum and its ability to sustain dividend payments, especially when compared to competitors like Telenor and Telia, which are viewed more favorably.

UBS predicts that Tele2's expected free cash flow for 2025 and 2026 will be 7% and 10% lower than consensus estimates, respectively. This outlook is influenced by factors such as the shutdown of legacy TV services and uncertainties surrounding taxation. Despite these challenges, UBS recognizes potential long-term advantages for Tele2, including focused single-market exposure and an attractive dividend policy, as well as expectations for medium-term investment normalization and market consolidation in Sweden.

On the other hand, UBS considers Telenor to be the preferred choice in the Nordic telecom sector, citing a stronger outlook. Following the downgrade, Tele2 B shares declined by 2.5% and were trading at SEK 107.05 as of 10 a.m.