Short Description
Despite a price target cut, Turkcell (TKC) remains a ‘Buy’ on strong 2026 outlook. Discover why analysts see value in this undervalued European telecoms stock.
Read Time
2 minutes, 15 seconds.
**Main Article
BofA Securities recently trimmed its price target for Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) but firmly maintained its Buy rating, reinforcing the stock’s position among the best undervalued European stocks. The firm projects a robust future for the Turkish telecom giant, forecasting a 7% annual revenue growth—excluding inflation—by 2026. A key driver of this optimism is the firm’s expectation that Turkcell will achieve a strong EBITDA margin of approximately 43%. This combination of steady growth and high efficiency underscores TKC’s significant value proposition for investors seeking exposure in the European telecommunications sector.
Looking ahead, BofA highlighted two major catalysts for Turkcell’s performance. The commercial launch of 5G services in Turkey, slated for April 2026, is poised to unlock substantial new revenue streams and enhance service offerings. Furthermore, the company’s unique and growing presence in the data center market is anticipated to become a significant profit pillar, contributing roughly 10% of total revenue over the next five years. This strategic diversification beyond traditional telecom services indicates a forward-thinking approach to capitalizing on digital infrastructure demand.
Beyond operational strengths, Turkcell’s attractive financial health bolsters its investment case. Analysts project a conservative net debt to EBITDA ratio of just 0.9x by 2026, reflecting a very solid balance sheet. This low leverage, coupled with manageable foreign exchange exposure, provides the company with ample flexibility. BofA suggests this financial stability will allow Turkcell to sustain an attractive dividend payout ratio of 50%, offering a compelling total return profile for long-term shareholders focused on European stocks and undervalued opportunities.
Short Summary
Turkcell (TKC) presents a compelling value case, backed by a ‘Buy’ rating and a positive 2026 outlook from BofA. With catalysts like 5G rollout, a growing data center segment, strong projected margins of 43%, and a healthy dividend policy, TKC stands out as an undervalued European stock with significant growth potential and financial stability. Investors should watch this telecom leader closely.
