AlembicHC raised its price target on Telecom Egypt Co SAE and said it expects the landline monopoly's domestic wholesale business to see an increase in revenue from higher mobile traffic.
The brokerage, which raised its price target on the company's stock by 2.7 percent to 18.5 Egyptian pounds, continued to rate it as "overweight".
"Telecom Egypt offers the highest sustainable yield among peers and the potential for even higher dividends as it generates Egyptian pounds 1.2 billion in excess cash annually," senior analyst Karim Khadr said in a note to clients.
The analyst expects a slight decline in 2011-13 revenue from lower voice and access income for the company due to price wars among mobile operators.
Telecom Egypt's second-quarter voice revenue fell 8.2 percent sequentially as more customers failed to pay bills and had their lines disconnected.
The analyst sees higher domestic wholesale and internet revenue partially offsetting the expected decline in revenue.
The company's stock, which is among the brokerage's top-picks list, closed at 15.28 Egyptian pounds on Monday.