Why isn’t anyone talking about share buybacks? A 5.5% dividend yield combined with 3% share buybacks seems like a pretty nice return for shareholders. On top of that, a couple of percentage points of earnings growth, which raises the expected return to about 10 percent.
Doesn’t sound bad for such a defensive company.
There was no mention of cancelling the purchased own shares, was there? If the purchased shares are not cancelled, then it is not a distribution of profits to shareholders.
Shareholders only benefit from share repurchases if the shares are also cancelled, because this increases their ownership stake in the company’s future cash flows without them having to inject new equity into the company. This is based on the assumption that, in the long run, share repurchases and the cancellation of shares should also lead to an increase in the share price, assuming that it is a high-quality company generating stable cash flows. In such a case, every owner benefits from it, meaning their owned shares are more valuable the fewer other owners there are to share those future cash flows.
This graphic, screenshotted from Blomma, shows Elisa’s capital allocation starting from 2015. Share repurchases are barely noticeable, and even the minor purchases have most likely been part of management compensation. The authorization sought from the Annual General Meeting is therefore more of a normal practice than a signal of a potential buyback program. I believe that a similar-sized authorization has also been sought in past years.
Elisa’s share count has rather slightly increased than decreased in recent years, as can be seen from that. The table can be found on Elisa’s company page in the service, under “Figures and Forecasts”.
This is an authorization to acquire own shares. Typically, authorization is sought even if there is no intention to use it. Many other companies operate in exactly the same way.
Elisa’s upcoming quarters will be interesting to follow. Especially the ARPU of mobile subscriptions and thus the market size has grown strongly for the past 2 years. Elisa and other operators have ridden this wave elegantly. However, if competition now intensifies, it will also put pressure on ARPU development, and the market growth development has already been largely priced into the base. A very worrying trend and Q4 result of -25k postpaid subscriptions; if the base development continues like this, it truly threatens future MSR development. On top of this, there’s also broadband competition for single-family homes, which will certainly create more pressure.
That’s true too, that it wasn’t directly mentioned what the purchases are for 
it just confused me when it was announced at the same time as the dividend distribution 
It’s a shame though, share repurchases for cancellation would fit well for a stock like Elisa’s.
There has always been competition, but on the other hand, the market has always been divided among three operators. Before, the competition was based on call and text message prices, and now it’s on subscription speeds. There have always been differences in network coverage, which for some may be the basis for choosing an operator.
The ARPU of traditional postpaid subscriptions will certainly be partly reduced by mobile subscriptions switching to fiber. It’s probably more common for more expensive full-speed mobile subscriptions to switch to fiber than entry-level 4G subscriptions. It’s also probably easier for an operator to make device sales as an add-on to a home 5G subscription than to a phone subscription.
Here are @Joni_Gronqvist’s conclusions on Elisa’s Q4 results: Elisa Q4'24: Osakkeen arvostus on matalampi kuin vuosiin - Inderes
And a couple of other analyst reactions from Kauppalehti’s flash news:
Carnegie raises Elisa’s recommendation to hold (prev. sell), target price 41.00 EUR unchanged
Danske Bank lowers Elisa’s recommendation to hold (prev. buy) and target price to 45.00 EUR (prev. 50.00 EUR)
One more: DNB Markets lowers Elisa’s target price to 45.00 EUR (prev. 47.00), hold recommendation unchanged
It is true that Elisa’s valuation is lower than in years. It is also simultaneously true that Elisa is quite an expensive stock by traditional P/E and P/B metrics.
EDIT: I corrected the postpaid subscriptions in that table
Today, DNA’s (Telenor’s result) also came in. With that, we now have information on subscription number development from all operators for Q4. I made the accompanying comparison table, which perhaps sheds some light on why I believe Elisa had a challenging quarter. Unfortunately, DNA/Telenor now only provides the total number of subscriptions without M2M, so its distribution remains subject to my own assessment.
So, at first glance, the situation with total subscriptions might look okay – Elisa’s was quite flat, and Telia significantly increased its number of subscriptions.
Then, looking at Elisa and Telia, M2M subscriptions increased quite a lot for both. For Telia, the increase seemed to be concentrated towards the end of the year, thus gaining market share compared to Elisa. DNA’s M2M subscription numbers are unknown. Based on my experience, the ARPU for M2M subscriptions can be almost anything from cents to euros, but a good average might be a few euros. This is because usage needs vary greatly, from electric cars to industrial automation, with completely different data consumption.
Therefore, it makes sense to remove M2M subscriptions from the comparison anyway, as based on Elisa’s provided data, Postpaid ARPU is €23.60, and mobile ARPU without M2M is around €22.
So, when comparing mobile subscriptions without M2M, Elisa took a hit of -42 thousand, which is over one percent of the entire subscription base. With the ARPU assumption of €22, this has an impact of €22 * 42k = €0.9M on monthly revenue, which amounts to about ten million annually. Since the business is investment-driven, this probably goes almost entirely to the margin…
A couple of tweets from @OsakeKeisari about Elisa’s performance. 
https://x.com/OsakeKeisari/status/1888241565337837925
https://x.com/OsakeKeisari/status/1888245614237917264
Let’s pick up for the thread @Omavaraisuushaaste’s post about new stock picks, one of which is Elisa. He describes his investment in Elisa as a replacement for a short-term bond fund.
The intention is not to get maximum returns, but to replace short-term bond funds with Elisa shares. I feel that Elisa’s business is the least risky in the entire Helsinki stock exchange, even less risky than Sampo.
More details from Esa’s blog.
Citi has lost faith in Elisa, the target price is still being lowered, quick news from Kauppalehti: Citi lowers Elisa’s target price to 37.00 euros (previously 38.00), reiterates sell recommendation
I looked at Blomma’s and Citi’s recommendation history. The data extended to 2018, and since then, the recommendation has fluctuated between “sell” and “neutral”. “Sell” has been continuously in effect since summer 2023. It would have been nice to find the report and read the rationale, but I couldn’t find it.
EDIT: added mention of consumer ARPU
Elisa seems to have taken the melting subscriber count seriously. It’s trying to fish for MOI’s customers again, practically for free. (€2.99/month vs. “normal €25.99/month” and "normal Below-the-line offer price approx. €20). And as a reminder, Elisa’s consumer subscription average ARPU hovers around €23.
This is unlikely to have any short-term impact on the share price, but it could, of course, be one indication that the rise in the average subscription price may not continue in quite the same way…
I took out a MOI subscription myself, let’s see if an offer comes 
Below is also a link to the original discussion.
More competition for Elisa in the Finnish market? Gigantti has established its own company for MVNO operations. It remains to be seen whose network they will operate on…
Elisa is holding a CMD in London today, Thursday. Unfortunately, there is no live stream available from the event, but as I understand it, the recording and presentations will be made freely available later.
I couldn’t go to London myself to conduct an interview, but Jaakko Kujanpää, who is already there handling production on behalf of Inderes, promised to take care of it. If you have any questions, you can post them in the thread. If we don’t get them asked during the CMD, we’ll continue on the next earnings day.
We should probably get announcements this morning on how the strategy and targets might be updated.
EDIT. errors/question phrasing
Well, here are a few to start with
Elisa’s updated financial targets and international software business into its own segment.
It’s a shame we can’t follow the live broadcast, but you can check out the presentations from that link.