AGR cuts Maroc Telecom target price as investment cycle pressures dividends

Thursday 26 March 2026 - 13:43

By: Dakir Madiha

AGR cuts Maroc Telecom target price as investment cycle pressures dividends

Attijari Global Research has maintained a hold recommendation on Maroc Telecom while lowering its target price to 100 dirhams from 110 dirhams, citing a more demanding financial environment shaped by heavier capital spending and reduced dividend generosity. The research house acknowledges the operator's structural resilience but flags that 2025 results came in below initial forecasts, reinforcing a strategic shift already under way.

Maroc Telecom posted consolidated revenue of 36.68 billion dirhams in 2025, essentially flat year on year. Published EBITDA fell 3.6% to 18.49 billion dirhams, leaving a margin of 50.4%, while recurring net profit attributable to the group dropped 4.9% to 5.65 billion dirhams. The dividend per share came in at 4 dirhams, against an AGR forecast of 4.81 dirhams, with achievement rates of 94% for adjusted net profit and 83% for the dividend relative to the firm's model. The stock has lost 14.6% over the past twelve months, while the MASI index gained 2.3% over the same period.

AGR attributes the earnings shortfall partly to a sharper-than-expected rise in depreciation charges, a direct consequence of the group's ongoing infrastructure push. Maroc Telecom is investing to support a new development cycle centred on data, fibre, and 5G, aligned with the national Digital Morocco 2030 roadmap and the country's preparations for the 2030 World Cup. This investment load is constraining near-term earnings, with the payout ratio limited to 50% of reported profit and 62% on a recurring basis, compared with a prior AGR assumption of 70%.

In Morocco, 2025 domestic revenue fell 2.4% to 18.69 billion dirhams. Mobile revenue declined 4.7%, reflecting regulatory constraints on offers for the incumbent, intensified competition, and the ongoing substitution of voice usage by data. Fixed and mobile data provided some offset: mobile data revenue grew 5.1%, fixed data rose 4.4%, and the FTTH customer base expanded by 35% over the year. The group is concentrating its domestic repositioning on fibre and digital services to shift revenue dependence away from legacy products toward higher-value broadband and content.

African subsidiaries delivered a more positive picture, with revenue rising 2.4% to 19.15 billion dirhams despite tougher regulatory and tax conditions across several markets. Growth was supported by the expansion of mobile data, fixed internet, and mobile money services, which offset the decline in call termination income. AGR views this geographic and service diversification as a stabilising factor that helps the group defend high margins and maintain its investment capacity without overstretching the balance sheet.

Looking ahead, AGR has raised its capex-to-sales ratio assumption to an average of 23% from 21%, trimmed its expected EBITDA margin to around 50% from 52%, and adjusted its target payout ratio to 65%. The firm projects consolidated revenue of 37.19 billion dirhams in 2026 and 38.21 billion dirhams in 2027, with recurring net profit recovering to 6.04 billion dirhams and 6.11 billion dirhams respectively. Dividend per share is forecast at 4.46 dirhams for 2026 and 4.60 dirhams for 2027, implying an average yield of about 4.8% over the forecast period. AGR concludes that Maroc Telecom retains investment appeal on the Casablanca market, but that its case now rests primarily on income stability rather than rerating potential, with the dividend as the main medium-term performance driver.