Telstra's performance during and since the depths of covid-19 shows the resilience of its earnings and the strength of its balance sheet. The AUD 2.7 billion cost-out program under T22 was delivered, and an additional AUD 428 million of costs was eliminated under the T25 plan.
TLS is trading within a range we consider fairly valued.
Price
A$4.81
Fair Value
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Uncertainty
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1-Star Price
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5-Star Price
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Economic Moat
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Capital Allocation
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Bulls Say, Bears Say
Bulls
Telstra has market-leading shares across all vital telecommunications segments and is likely to maintain these positions in the future.
Bears
Regulatory risks are real. Wholesale NBN prices are high and could increase further, while government scrutiny on Telstra's market power is ever-present, especially in regional and rural areas.
Telstra is Australia’s largest telecommunications company, with dominant market shares in voice, mobile, enterprise telecom, and fixed-line broadband resale via the national broadband network. Telstra provides most of its products and services via its infrastructure assets, such as a fixed-line network (data centers, exchanges, poles, ducts, pits and pipes, fiber network), a mobile network, and mobile towers. Its customers span retail, corporate, government, wholesale, and overseas segments. Telstra also provides the government-owned, last-mile fixed-line National Broadband Network with long-term access to its infrastructure, in return for recurring payments. Finally, Telstra operates a leading telecom operation in Papua New Guinea and the surrounding South-Pacific countries.