Zacks Investment Research downgraded shares of SK Telecom Co. Ltd. (SKM) (SKM) from OUTPERFORM to NEUTRAL on January 02, 2014, with a target price of $26.00.
We downgrade our recommendation on SK Telecom from Outperform to Neutral. Stiff competition and saturation continue to affect the company's wireless market. Further, high marketing expenses associated with smartphone rollout could further increase promotional expenses. However, strong ancillary units, new businesses and an expanding Long Term Evolution (LTE) subscriber base will likely help the company to sustain its performance. SK Telecom's focus on developing LTE-Advanced technologies coupled with the rollout of LTE-Advanced smartphones will further drive subscriber growth. Launch of affordable video services will further boost its topline. Moreover, SK Telecom has teamed up with different foreign carriers to offer LTE roaming service in different countries.
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