Bezeq Raises 2026 Forecasts Following Strong Quarterly Results

Bezeq, Israel's leading telecommunications company, has raised its financial forecasts for 2026 for the fourth time in just over a year. The company, which owns Pelephone, Bezeq International, and yes, attributes the upgrade to two strong quarters marked by improved business performance, especially in its fixed-line segment, driven by expected revenue growth in some areas and reduced expenses. Bezeq projects a comparative annual profit (excluding other operational expenses/incomes, revaluations, and employee options) between 1.15 and 1.2 billion shekels, representing a 12% increase from its previous forecast. The company also anticipates a comparative EBITDA of 3.8 to 3.85 billion shekels, up 2%. Capital expenditures are expected to remain steady at about 1.6 billion shekels, reflecting a decline as Bezeq completes its major fiber-optic internet infrastructure project, now covering over 3 million homes with 1.1 million fiber subscribers.

These forecast revisions come shortly after Bezeq reported second-quarter 2026 revenues of 2.2 billion shekels, with core business revenues rising 4% to just over 2 billion shekels. The company posted a net comparative profit of 315 million shekels and announced a dividend payout of 415 million shekels. Additionally, as part of a buyback plan totaling 800 million shekels by 2029, Bezeq has already repurchased shares worth 100 million shekels. The company’s stock rose 2% to a market value of 21.3 billion shekels, marking a 77% increase over the past three years and a 157% rise over five years.

Analysts view the forecast upgrade as expected given Bezeq’s solid first-half performance, with a cumulative net comparative profit of about 615 million shekels. Lior Wider, founder of the "Earnings Multiplier" information service, praised Bezeq’s strong infrastructure assets, diversified business, robust management, financial stability, and attractive dividend policy. He highlighted growth potential in expanding business customer activities and submarine cable projects, noting that the Wecom acquisition and potential structural separation repeal could positively impact future sentiment and valuation.

Looking ahead, analysts expect gradual price increases in cellular services supported by easing competition and 5G adoption, which should boost average revenue per user (ARPU), despite risks from eSIM technology on roaming revenues. Internet infrastructure is expected to continue growing steadily in fiber subscribers and ARPU, aided by consolidation in television services following deals involving Partner and Sting+. Bezeq International’s memorandum of understanding to build and operate a submarine cable system, with an estimated investment of around 250 million shekels over three years, is seen as a strategic move likely to yield significant returns.

Investment experts like Eyal Shina from Pasternak & Co. also see opportunities in the telecom sector, citing Israel’s relatively low cellular prices and increasing dependence on high-speed internet. He noted that unless regulators act more actively, prices may rise, benefiting investors despite consumer drawbacks. Artificial intelligence is expected to reduce service personnel needs, freeing real estate space and supporting dividend distributions. Earlier this year, Bezeq set 2029 targets including core revenues of 8.7-8.9 billion shekels, comparative EBITDA of 4.2-4.4 billion shekels, capital expenditures of 1.5-1.6 billion shekels, and average annual net profit growth above 8%.