Turkcell Iletisim Hizmetleri A.S. has gained renewed attention from analysts as one of the best undervalued European stocks to buy now, following a recent evaluation by BofA Securities. On January 12, the investment firm adjusted its price target for the Turkish telecom operator while maintaining an optimistic outlook on the company’s growth prospects. BofA Securities reduced Turkcell’s price target to TRY126.40 but retained its Buy rating for the stock.
The telecommunications provider, which trades on the New York Stock Exchange under the ticker TKC, is positioned to benefit from several upcoming catalysts according to the analysis. BofA Securities projects that Turkcell’s revenue will increase by approximately 7% excluding inflation in 2026, while maintaining strong operating margins of 43%. These projections underscore the company’s operational efficiency in a competitive market.
5G Rollout Expected to Drive Growth
The commercial launch of 5G services scheduled for April 2026 represents a significant catalyst for Turkcell’s performance, according to BofA Securities. This technological advancement is expected to open new revenue streams and enhance the company’s competitive position in the Turkish telecommunications market. The transition to fifth-generation wireless technology could attract new subscribers and increase data consumption among existing customers.
Additionally, the firm highlighted Turkcell’s strategic expansion into data center operations as a key differentiator. This unique positioning in the infrastructure segment is projected to contribute approximately 10% of total revenue over the next five years. The diversification into data centers positions the undervalued European stock to capture growing demand for cloud services and digital infrastructure.
Strong Financial Position Supports Dividend Policy
BofA Securities emphasized Turkcell’s solid financial foundation as another favorable factor for investors. The company’s net debt to EBITDA ratio is expected to reach 0.9x in 2026, indicating relatively low leverage compared to industry peers. This healthy balance sheet provides the telecom operator with financial flexibility to pursue growth initiatives while maintaining shareholder returns.
Furthermore, the firm noted that Turkcell’s modest net foreign exchange exposure reduces currency-related risks. According to BofA, these financial characteristics could enable the company to sustain a dividend payout ratio of 50%, making it attractive for income-focused investors seeking European stocks with reliable distributions.
Core Business Operations and Market Position
Turkcell Iletisim Hizmetleri A.S. operates as a Turkish provider of converged telecommunication and technology services across multiple segments. The company’s core offerings include tower and satellite services, fixed data services, international roaming services, and voice services. This diversified service portfolio helps mitigate risks associated with any single business line.
However, investors should consider the broader economic context when evaluating Turkish equities. Currency volatility and inflation dynamics in Turkey have historically impacted telecommunications companies operating in the region. Meanwhile, Turkcell’s infrastructure investments and technology upgrades require substantial capital expenditures that could affect near-term profitability.
The combination of revenue growth projections, margin stability, and strategic positioning in emerging technologies makes Turkcell one of the undervalued European stocks attracting analyst attention. In contrast to some competitors, the company’s expansion into data centers provides exposure to secular growth trends in digital infrastructure.
Market observers will be monitoring Turkcell’s progress toward its 2026 targets and the successful deployment of 5G services in the coming months. The company has not announced specific timelines for additional infrastructure investments beyond the confirmed April 2026 5G launch date.
