”We observe a marked improvement in the earnings visibility and growth outlook of the sector over the past 6-12 months – in particular, 2014 telecom earnings forecasts have been raised by 4.5% on average over the past six months,” writes Goldman Sachs in a survey of telecom markets in EMEA emerging countries.

Goldman Sachs raises its target prices for Partner Communications Ltd.(Nasdaq: PTNR; TASE: PTNR), Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) but cuts its recommendation for Partner from “Neutral” to “Sell.”

In justifying the downgrade of Partner to “Sell,” while raising the target price 31% to NIS 27.4, Goldman Sachs writes, “Partner is exposed to the highly fragmented and tightly regulated Israeli mobile market, and as a result screens as a laggard on our CEEMEA telecoms industry positioning framework. Although we believe the mobile market should start showing signs of rationalization, we see Partner’s earnings visibility as relatively low, as the company has long maintained a low level of investments, constraining the profitability of the business. This could limit potential earnings stabilization, deleveraging and dividend increases. Together with Partner outperforming the MSCI Emerging Markets index by 44% over the past 12 months, this prompts us to downgrade the stock to Sell from Neutral.”

Goldman Sachs reiterates Bezeq’s “Buy” recommendation and lifts its target price 36% to NIS 7.89. On Bezeq, Goldman Sachs says, “Although the Israeli telecom sector remains highly regulated and competitive, we believe Bezeq is relatively better positioned as it is exposed to the more concentrated fixed-line market. In our view, the mobile market should start showing signs of rationalization as the newcomers should have passed their market share milestones by January 2014. We do not believe the fixed-line business will face sizeable pressure from the IEC JV (which will build a countrywide fiberoptic infrastructure) and recent FTR cuts, while potential elimination of structural separation could bring more cost efficiencies. We expect the company to maintain its dividend policy, which provides an attractive c.13% dividend yield for 2013E and 10% going forward. This, together with the 22% upside implied by our new 12-month target price of NIS7.89, creates an appealing shareholder return proposition, in our view. We reiterate our Buy rating on Bezeq.”

For Cellcom, Goldman Sachs reiterates a “Neutral” recommendation and raises its target price 57.5% to $12.60.