BUZZ-Telefonica: "Danger beneath the surface" - Bernstein

** Bernstein cuts Spanish telecom group Telefonica (LSE: 826858.L - news) (-0.7%) to "underperform" on elevated competitive concerns in Spain and FX deterioration in Latam

* Spain: Bernstein expects a share redistribution in a 1.6 pct '16-'20 CAGR market amid competitive threats from Masmovil and Vodafone

* UK, Germany: poorly-positioned assets (O2 UK "in a precarious position given its spectrum holdings and underinvestment" and O2D suffers from poor consumer perception)

* Brazil and Hispam: fine organically but recent depreciation of currency rates, which Bernstein does not expect to reverse anytime soon, represent a significant headwind to co's EUR earnings

** Bernstein concern's translate to financial forecasts below market estimates (4% and 5% below consensus revenue guidance for 2018 and 2019; OIBDA 5% and 6% below)