Ion Jauregui –ActivTrades Analyst
Telefónica is experiencing one of its strongest market moments in recent years, with a nearly 20% appreciation so far in 2025 and a share price that has reached €4.73. These are levels not seen since July 2022, sparking renewed investor interest, although questions remain regarding its ability to sustain this momentum.
Fundamental Analysis
The company is undergoing a structural transformation aimed at improving profitability and reducing operational risk. In this regard, it has accelerated the divestment of assets in less strategic Latin American markets such as Ecuador, Peru, Argentina, Uruguay, and Colombia, focusing instead on its core operations in Europe and Brazil. This strategy has allowed Telefónica to reduce its exposure to currency volatility and improve capital allocation efficiency.
Despite reporting a net loss of €1.304 billion for the fiscal year, this figure is primarily attributable to accounting write-downs related to asset disposals and does not undermine its cash flow generation capacity or its commitment to maintain the annual dividend of €0.30. With a customer base exceeding 390 million and a solid infrastructure network, the operator remains a key player in the markets where it operates. Its current focus on financial discipline and risk profile improvement aligns with an environment in which operational stability and efficiency outweigh aggressive growth strategies.
Technical Analysis
From a technical perspective, Telefónica broke through a significant resistance level at €4.430 at the end of May — a ceiling in place since its sharp price drop in 2020. This breakout was accompanied by a notable increase in volume, adding validity to the move.
The current price of €4.610 aligns with a medium-term high. If the stock manages to consolidate above the €4.628 high in the coming weeks, it could pave the way toward €5.00, where the next relevant resistance level lies, coinciding with the current point of control at €5.064. Conversely, a failure to hold above current levels could lead to a retracement toward the current moving average around €3.930 or slightly above, where previous highs now act as support. The RSI currently stands in overbought territory at 64.67%, suggesting there may still be room for an upward move toward the €5.00 point of control zone if bullish momentum persists.
Conclusion
Telefónica is at a pivotal stage in its strategic redefinition, a process that has begun to reflect positively in its share price. This shift is driven by a more rational approach to risk management, a clear focus on priority markets, and a sustained commitment to financial discipline. The technical breakout from historic resistance levels strengthens the case for a continued bullish trend, although caution remains warranted: further upside will depend on sustained consolidation above current levels and the emergence of solid catalysts to support the company’s narrative. After years of sideways movement, the stock has finally broken out — now comes the true test: turning this rally into a lasting trend.
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.
Telefónica is experiencing one of its strongest market moments in recent years, with a nearly 20% appreciation so far in 2025 and a share price that has reached €4.73. These are levels not seen since July 2022, sparking renewed investor interest, although questions remain regarding its ability to sustain this momentum.
Fundamental Analysis
The company is undergoing a structural transformation aimed at improving profitability and reducing operational risk. In this regard, it has accelerated the divestment of assets in less strategic Latin American markets such as Ecuador, Peru, Argentina, Uruguay, and Colombia, focusing instead on its core operations in Europe and Brazil. This strategy has allowed Telefónica to reduce its exposure to currency volatility and improve capital allocation efficiency.
Despite reporting a net loss of €1.304 billion for the fiscal year, this figure is primarily attributable to accounting write-downs related to asset disposals and does not undermine its cash flow generation capacity or its commitment to maintain the annual dividend of €0.30. With a customer base exceeding 390 million and a solid infrastructure network, the operator remains a key player in the markets where it operates. Its current focus on financial discipline and risk profile improvement aligns with an environment in which operational stability and efficiency outweigh aggressive growth strategies.
Technical Analysis
From a technical perspective, Telefónica broke through a significant resistance level at €4.430 at the end of May — a ceiling in place since its sharp price drop in 2020. This breakout was accompanied by a notable increase in volume, adding validity to the move.
The current price of €4.610 aligns with a medium-term high. If the stock manages to consolidate above the €4.628 high in the coming weeks, it could pave the way toward €5.00, where the next relevant resistance level lies, coinciding with the current point of control at €5.064. Conversely, a failure to hold above current levels could lead to a retracement toward the current moving average around €3.930 or slightly above, where previous highs now act as support. The RSI currently stands in overbought territory at 64.67%, suggesting there may still be room for an upward move toward the €5.00 point of control zone if bullish momentum persists.
Conclusion
Telefónica is at a pivotal stage in its strategic redefinition, a process that has begun to reflect positively in its share price. This shift is driven by a more rational approach to risk management, a clear focus on priority markets, and a sustained commitment to financial discipline. The technical breakout from historic resistance levels strengthens the case for a continued bullish trend, although caution remains warranted: further upside will depend on sustained consolidation above current levels and the emergence of solid catalysts to support the company’s narrative. After years of sideways movement, the stock has finally broken out — now comes the true test: turning this rally into a lasting trend.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.