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Bezeq
(TASE:BEZQ)
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Rating:73Outperform
Price Target:
834.00
▲(6.57% Upside)
Action:Upgraded
Date:08/07/26
The score is driven primarily by solid profitability and strong cash generation, reinforced by a positive earnings update with reiterated guidance and enhanced shareholder returns. Offsetting these positives are elevated leverage risk and only moderately supportive technicals, while valuation is helped by a moderate P/E and high dividend yield.
Positive Factors
Cash generation
Sustained, high free cash flow provides durable funding for dividends, buybacks, network capex and selective M&A without relying on new equity. Strong cash conversion improves resilience to cyclical revenue swings and gives management flexibility to pursue strategic infrastructure projects over the medium term.
Negative Factors
High leverage
Elevated debt-to-equity materially increases financial risk for a utility-like telecom. Leverage amplifies earnings volatility, constrains capital allocation flexibility in stress scenarios, and limits ability to pursue large strategic acquisitions without raising additional financing or weakening credit metrics.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Sustained, high free cash flow provides durable funding for dividends, buybacks, network capex and selective M&A without relying on new equity. Strong cash conversion improves resilience to cyclical revenue swings and gives management flexibility to pursue strategic infrastructure projects over the medium term.
Read all positive factors
Bezeq (BEZQ) vs. iShares MSCI Israel ETF (EIS)
Market Cap
₪22.10B
Dividend Yield5.09%
Average Volume (3M)5.13M
Price to Earnings (P/E)18.5
Beta (1Y)0.79
Revenue Growth-1.62%
EPS Growth-1.00%
CountryIL
Employees5,286
SectorGeneral
Sector StrengthN/A
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.43
Shares Outstanding2,758,593,500
10 Day Avg. Volume5,032,574
30 Day Avg. Volume5,128,399
Financial Highlights & Ratios
PEG Ratio0.41
Price to Book (P/B)6.67
Price to Sales (P/S)2.26
P/FCF Ratio12.44
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.44
Revenue Forecast (FY)₪8.77B
Bezeq Business Overview & Revenue Model
Company Description
Bezeq The Israel Telecommunication Corp. Ltd., established in 1980 and headquartered in Holon, Israel, is a comprehensive provider of communication services to both residential and business customers across the nation. Its operations are structure...
How the Company Makes Money
Bezeq makes money primarily by charging customers recurring service fees for connectivity and communications services, complemented by usage-based charges and business-to-business (B2B) contracts. Key revenue streams typically include: (1) Fixed-l...
Bezeq Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 17, 2026
Earnings Call Sentiment Positive
The call presented strong operational and financial results across the group: revenue and profitability growth, expanding fiber and 5G adoption, record performance at yes, improved free cash flow and shareholder returns (dividend and buyback). Headwinds were limited and specific — mostly lower roaming revenues due to the war (pressuring mobile ARPU), a small broadband revenue impact from a wholesale tariff cut, a modest increase in net debt, and some near-term regulatory/timing uncertainty. Management emphasized continued execution, M&A and submarine cable initiatives and maintained 2026/2029 targets.Positive Updates
Group Revenue and Profit Growth
Core revenues grew 4% year-over-year to over ILS 2.0 billion in Q2; comparable (comp) net profit rose 38% year-over-year, driven by higher revenues and lower financing and operating expenses (after adjusting for changes in yes' valuation in Q2 2025).
Negative Updates
Mobile ARPU Pressure from War-Related Roaming
Pelephone ARPU declined 2.2% year-over-year to ILS 45 in Q2, mainly due to reduced roaming revenues stemming from the war with Iran; management expects roaming to recover as travel resumes but near-term impact persisted this quarter.
Read all updates
Q2-2026 Updates
Positive
Negative
Group Revenue and Profit Growth
Core revenues grew 4% year-over-year to over ILS 2.0 billion in Q2; comparable (comp) net profit rose 38% year-over-year, driven by higher revenues and lower financing and operating expenses (after adjusting for changes in yes' valuation in Q2 2025).
Read all positive updates
Company Guidance
Management reiterated its 2026 outlook and left the 2029 targets unchanged, guiding comp EBITDA of ILS 3.7–3.8 billion for the year (with Q2 comp EBITDA at ILS 978 million and comp EBITDA up 6.2% y/y) and saying it will only update the market if actuals deviate more than 10% from the mid‑range; they aim to maintain an AA rating and a stable leverage profile (net debt ≈ ILS 5.2 billion, net debt/comp EBITDA ~1.6x and comfortable around 1.5–1.6x). The board recommended a cash dividend of ILS 415 million (about 80% of H1 2026 profits) and launched a new ILS 100 million buyback within a ILS 800 million multiyear program, while highlighting targets including 300,000 5G Max subscribers by year‑end and a 2029 mobile ARPU ambition of ~ILS 50; management expressed confidence in H2 if the geopolitical situation stabilizes and roaming volumes recover.Bezeq Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
55
Neutral
Cash Flow
79
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.66B | 8.70B | 8.88B | 9.10B | 9.03B | 8.82B |
| Gross Profit | 5.07B | 7.48B | 7.44B | 7.17B | 7.50B | 7.30B |
| EBITDA | 3.73B | 3.73B | 3.58B | 3.70B | 3.46B | 3.71B |
| Net Income | 1.21B | 1.42B | 1.07B | 1.19B | 1.00B | 1.18B |
Balance Sheet | ||||||
| Total Assets | 15.14B | 15.94B | 15.16B | 13.88B | 13.41B | 13.93B |
| Cash, Cash Equivalents and Short-Term Investments | 1.88B | 2.83B | 2.69B | 1.76B | 1.64B | 1.93B |
| Total Debt | 9.08B | 9.77B | 9.61B | 9.00B | 9.18B | 10.04B |
| Total Liabilities | 12.37B | 12.98B | 12.66B | 11.68B | 11.79B | 12.84B |
| Stockholders Equity | 2.78B | 2.95B | 2.50B | 2.20B | 1.62B | 1.10B |
Cash Flow | ||||||
| Free Cash Flow | 1.97B | 1.58B | 1.70B | 1.75B | 1.80B | 1.15B |
| Operating Cash Flow | 3.26B | 3.26B | 3.45B | 3.46B | 3.50B | 2.84B |
| Investing Cash Flow | -1.11B | -1.88B | -2.30B | -1.88B | -1.58B | -1.65B |
| Financing Cash Flow | -2.31B | -1.39B | -895.00M | -1.75B | -2.15B | -1.06B |
Bezeq Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | ₪288.47M | 7.49 | ― | 4.09% | 7.17% | 176.38% | |
74 Outperform | ₪6.22B | 10.24 | 9.92% | 6.45% | -4.74% | 154.35% | |
73 Outperform | ₪22.10B | 18.49 | 54.58% | 5.09% | -1.62% | -1.00% | |
67 Neutral | ₪7.43B | 22.63 | ― | 6.27% | -3.67% | 7.73% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
IL:BEZQ
Bezeq
801.00
206.87
34.82%
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IL:SNCM
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IL:SCC
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165.20
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88.68%
IL:PTNR
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3,960.00
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IL:GLTL
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.