Bouygues Shares Decline After Revising Telecom FY26 Outlook

Shares of Bouygues experienced a decline on Thursday after the telecommunications giant revised its fiscal year 2026 guidance for its telecom division downward.

At 4:33 AM local time, Bouygues’ stock was down by 5%, trading at €28.60.

This reduction in guidance reflects growing concerns about Bouygues Telecom’s future performance. The company now anticipates only modest growth in revenue and EBITDA compared to its previous forecasts. Analysts from Morgan Stanley noted that while their projections were already below the previous guidance, the expected modest growth from 2023 to 2026 contrasts sharply with their current forecasts of 9% revenue growth and 14% EBITDAaL growth, highlighting potential downside risks.

In its updated forecast, Bouygues Telecom projects minimal growth in its service sales and EBITDAaL for the period between 2023 and 2026. This marks a significant downgrade from earlier expectations of over 15% and 25% growth rates, respectively.

This shift underscores the pressures the telecom industry is facing, driven by increased competition and evolving consumer behaviors. Additionally, Bouygues has updated its capital expenditure plans, cutting investment guidance from 2025 onward. The company believes it has already surpassed its coverage and quality targets, prompting a reassessment of investment needs amid a slowdown in mobile data usage growth.

Morgan Stanley analysts remarked that this reduction in capital expenditure aligns with recent trends among alternative network providers who are adopting a more conservative financial strategy.

While Bouygues has maintained its free cash flow guidance for fiscal year 2026, this figure carries caveats, as it does not account for working capital changes that could affect cash flow in the near future. Investors are also aware that any potential tax increases in France could further pressure Bouygues’ financial standing.

To strengthen its market position, Bouygues is set to launch a new brand, B.iG, on October 7. This range of family-oriented, multi-line offerings will feature competitive fiber plans and significant discounts for households that add mobile lines.

With discounts reaching up to €10 per month for each mobile line in families with multiple subscriptions, Bouygues aims to increase its share of the B2C market. However, these initiatives could dilute profit margins and heighten competitive pressures within the telecom industry.

The introduction of B.iG comes as competitors like Iliad have also launched family plans with limited discounts. Bouygues claims that customers could save up to €564 annually for four mobile lines, surpassing Iliad’s advertised savings of €480. Nonetheless, this pricing strategy raises concerns about increased competition and possible pricing instability, as rivals such as Orange and SFR may react to Bouygues’ aggressive offerings.