** Deutsche Bank sees European telecoms groups returning their "bond proxy" characteristics in 2025, citing improving cashflows, stronger balance sheets, higher returns and growth visibility

** It expects to see valuation multiples expanding modestly in 2025, with the sector trading at an average EV/EBITDA of 5.5x, supported by improving cashflows and reduced capex intensity

** The broker expects "growing solace for telco investors in 2025" with regulatory shifts favouring investment over consumer surplus and improved cashflow generation

** DB says stocks with potential to extend the rally include Orange ORAN.PA, Vodafone VOD.L, Telenor TEL.OL and Liberty Global LBTYA.O benefiting from operational improvements and easing competitive pressures

** Its top large-cap picks include Deutsche Telekom DTEGn.DE, with its U.S. exposure and robust returns, and KPN KPN.AS, benefitting from reduced capex and shareholder returns post-fibre rollout

** Among mid-caps, the broker prefers OTE OTECr.AT and Sunrise SUNN.S for their cashflow visibility, with Gamma GAMA.L leading UK mid-caps

** Tower companies like Cellnex CLNX.MC are expected to recover later in 2025, DB notes, as rate-sensitive valuations improve

** Its least-preferred stocks include Telefonica TEF.MC and Eutelsat ETL.PA, weighed down by structural and competitive challenges

(Reporting by Johan Bodinier)

((Johangeorgesroger.bodinier@thomsonreuters.com))