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Telstra Corporation Limited
(Sydney:TLS)
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Rating:65Neutral
Price Target:
AU$5.50
▲(12.47% Upside)
Action:Downgraded
Date:08/04/26
The score is driven primarily by stable-to-good financial performance (strong margins and improved ROE) and a supportive earnings call (reconfirmed guidance, increased buyback/dividend, strategic fibre progress). Offsetting factors are weakening cash flow trends, only neutral technicals, and a relatively high P/E that leaves less valuation cushion.
Positive Factors
Margin and ROE improvement
Consistently high gross margins (~63%) and a rising net margin/ROE profile signal durable operating efficiency and pricing power across core networks. Improved ROE shows the business is extracting better returns from equity, supporting reinvestment, dividends and strategic spending over the medium term.
Negative Factors
Declining free cash flow conversion
A near‑30% drop in FCF growth materially reduces financial flexibility. Lower FCF conversion constrains the company’s ability to fund large strategic builds, sustain buybacks/dividends, or accelerate capex without leaning on debt or cutting other investments, creating a persistent funding sensitivity in coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin and ROE improvement
Consistently high gross margins (~63%) and a rising net margin/ROE profile signal durable operating efficiency and pricing power across core networks. Improved ROE shows the business is extracting better returns from equity, supporting reinvestment, dividends and strategic spending over the medium term.
Read all positive factors
Telstra Corporation Limited (TLS) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$53.82B
Dividend Yield4.1%
Average Volume (3M)20.89M
Price to Earnings (P/E)24.0
Beta (1Y)0.12
Revenue Growth-0.81%
EPS Growth5.46%
CountryAU
Employees29,520
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.20
Shares Outstanding11,139,137,000
10 Day Avg. Volume22,850,401
30 Day Avg. Volume20,891,454
Financial Highlights & Ratios
PEG Ratio4.83
Price to Book (P/B)4.55
Price to Sales (P/S)2.50
P/FCF Ratio13.67
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$5.07Price Target Upside3.66% Upside
Rating ConsensusHold
Number of Analyst Covering9
EPS Forecast (FY)0.22
Revenue Forecast (FY)AU$24.08B
Telstra Corporation Limited Business Overview & Revenue Model
Company Description
Telstra Group Limited, founded in Melbourne, Australia, in 1901, delivers a comprehensive suite of telecommunications and information services to a diverse clientele of businesses, governments, and individuals, operating both domestically and inte...
How the Company Makes Money
Telstra makes money primarily by charging recurring service fees and usage-based charges for telecommunications connectivity and related services. Key revenue streams include: (1) Mobile services: revenue from consumer and business mobile plans (p...
Telstra Corporation Limited Earnings Call Summary
Earnings Call Date:Aug 12, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Feb 17, 2027
Earnings Call Sentiment Positive
The results show clear financial and operational progress: underlying EBITDA and cash earnings growth, a materially higher cash EPS (+14%), rising dividends (+10.5%) and continued heavy investment across mobile and digital infrastructure (Aura momentum, subsea partnerships). Management also delivered net operating leverage and concrete AI and workforce upskilling milestones. The principal negatives are a high‑profile July network outage (with ongoing regulatory review), elevated one‑off remediation and redundancy costs, some weakness in enterprise/international segments and continued SIO pressure in parts of the consumer base. On balance the company is demonstrating growth, disciplined capital allocation (buybacks plus CapEx) and strategic positioning in digital infrastructure, while exposure to execution, regulatory and reputational risk from the outage and elevated project costs remains.Positive Updates
Underlying EBITDA and Earnings Growth
Underlying EBITDAaL increased 4% to $8.3 billion; reported EBITDAaL up 3% to $8.2 billion. Net profit after tax up 2.7% to $2.4 billion and reported EPS up 5.3% to $0.199. Cash EPS grew 14% to $0.255, supported by BAU CapEx broadly flat and D&A growth.
Negative Updates
Significant Nationwide Network Outage and Ongoing Investigations
A major network outage occurred in July (post FY end). An internal and external expert investigation is ongoing; ACMA has commenced an investigation. Root cause initially linked to an undocumented design change and missed software update; regulatory and penalty risk remains uncertain.
Read all updates
Q4-2026 Updates
Positive
Negative
Underlying EBITDA and Earnings Growth
Underlying EBITDAaL increased 4% to $8.3 billion; reported EBITDAaL up 3% to $8.2 billion. Net profit after tax up 2.7% to $2.4 billion and reported EPS up 5.3% to $0.199. Cash EPS grew 14% to $0.255, supported by BAU CapEx broadly flat and D&A growth.
Read all positive updates
Company Guidance
Telstra guided FY‑27 underlying EBITDAaL of $8.5–$8.8 billion, BAU CapEx of $3.35–$3.65 billion (with a lift in network investment), cash EBIT of $4.75–$4.95 billion and strategic investment of $0.2–$0.3 billion; management reiterated its Connected Future 30 ambitions — mid‑single‑digit growth in cash earnings, continued positive operating leverage (c.2 percentage points), and improved returns (underlying ROIC was ~9% in FY‑26) — and confirmed Aura economics (target mid‑teens IRR and ~9‑year cash payback) as total strategic investment is expected to be around $1.8 billion through FY‑28, while balance‑sheet metrics cited included net debt ~1.9x, average cost of debt ~4.8% and a new on‑market buyback of up to $1 billion.Telstra Corporation Limited Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
68
Positive
Cash Flow
65
Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 22.94B | 22.72B | 22.93B | 22.70B | 21.28B |
| Gross Profit | 5.56B | 14.51B | 14.49B | 5.75B | 5.07B |
| EBITDA | 10.00B | 8.58B | 7.53B | 7.86B | 7.29B |
| Net Income | 2.24B | 2.17B | 1.62B | 1.93B | 1.69B |
Balance Sheet | |||||
| Total Assets | 44.12B | 44.97B | 45.55B | 45.03B | 41.63B |
| Cash, Cash Equivalents and Short-Term Investments | 1.10B | 1.01B | 1.05B | 932.00M | 1.04B |
| Total Debt | 18.60B | 18.00B | 16.97B | 15.87B | 14.27B |
| Total Liabilities | 29.13B | 28.65B | 28.20B | 27.21B | 24.65B |
| Stockholders Equity | 12.58B | 13.90B | 14.92B | 15.41B | 15.49B |
Cash Flow | |||||
| Free Cash Flow | 4.19B | 3.45B | 1.39B | 2.37B | 3.73B |
| Operating Cash Flow | 6.80B | 7.32B | 6.45B | 6.24B | 6.82B |
| Investing Cash Flow | -3.58B | -3.37B | -4.99B | -6.03B | -3.50B |
| Financing Cash Flow | -3.09B | -4.00B | -1.18B | -333.00M | -3.44B |
Telstra Corporation Limited Technical Analysis
Negative
4.89
Price Trends
5.02
Negative
5.17
Negative
5.03
Negative
Market Momentum
-0.04
Positive
33.83
Neutral
28.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:TLS, the sentiment is Negative. The current price of 4.89 is below the 20-day moving average (MA) of 4.98, below the 50-day MA of 5.02, and below the 200-day MA of 5.03, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 33.83 is Neutral, neither overbought nor oversold. The STOCH value of 28.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:TLS.
Telstra Corporation Limited Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | AU$53.82B | 24.03 | 16.66% | 4.01% | -0.81% | 5.46% | |
65 Neutral | AU$1.61B | 114.13 | 3.49% | ― | 26.11% | ― | |
62 Neutral | AU$1.63B | 66.56 | 5.01% | ― | 3.78% | -9.98% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
60 Neutral | AU$1.15B | 82.90 | 1.98% | ― | 30.34% | 426.42% | |
58 Neutral | AU$7.01B | 68.14 | 1.31% | 49.86% | -8.68% | ― | |
54 Neutral | AU$1.54B | 56.58 | 4.61% | 1.04% | 8.25% | -11.18% |
* Communication Services Sector Average
AU:TLS
Telstra Corporation Limited
4.78
0.04
0.87%
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10.99%
Telstra Corporation Limited Corporate Events
Telstra Cancels 25.4 Million Shares After On-Market Buy-Back
Jun 9, 2026
Telstra Group Limited has cancelled 25,413,931 ordinary fully paid shares following completion of an on-market share buy-back conducted on 9 June 2026. The reduction in issued capital indicates capital management activity that could enhance earnin...
Telstra Finalises $1.25 Billion On‑Market Share Buy‑Back
Jun 4, 2026
Telstra Group Limited has completed its on-market share buy-back program for its ordinary fully paid shares, as disclosed in a final Appendix 3C notification to the ASX. The program resulted in the repurchase of 245,892,740 shares for a total cons...
Telstra Continues On‑Market Share Buy-Back Program
Jun 4, 2026
Telstra Group Limited has continued its on-market share buy-back program, purchasing an additional 1,004,588 ordinary fully paid shares on 3 June 2026. This brings the total number of shares repurchased under the program, first notified in August ...
Telstra Continues On-Market Share Buy-Back Program
Jun 3, 2026
Telstra Group Limited has continued its on-market share buy-back program, reporting that it repurchased 1,455,456 ordinary fully paid shares on the previous trading day. This lifts the cumulative total bought back under the program to 243,432,696 ...
Telstra Updates Market on Progress of On‑Market Share Buy‑Back
Jun 2, 2026
Telstra Group Limited has provided an update on its on‑market share buy‑back program involving its ordinary fully paid shares traded under the ASX code TLS. The latest daily notification shows that as of the previous trading day the co...
Telstra Updates Market on Progress of Ongoing On-Market Share Buy-Back
Jun 1, 2026
Telstra Group Limited has provided an updated notification to the ASX regarding its ongoing on-market share buy-back of ordinary fully paid shares. The company reported that a total of 240,120,622 shares had been repurchased before the previous tr...
Telstra Reports Ongoing Progress in On‑Market Share Buy‑Back
May 29, 2026
Telstra Group Limited has updated the market on progress of its on‑market share buy‑back for its ordinary fully paid shares, TLS, originally notified in August 2025. The company reported that, as of 29 May 2026, it had repurchased a cu...
Telstra Issues Daily Update on Ongoing On-Market Share Buy-Back
May 27, 2026
Telstra Group Limited has provided a daily update on its on-market share buy-back program for its ordinary fully paid shares traded under the ASX code TLS. The company reported that, as of the latest notification dated 27 May 2026, it had repurcha...
Telstra Reports Ongoing Progress in On‑Market Share Buy‑Back
May 26, 2026
Telstra Group Limited has provided an updated notification to the ASX on its ongoing on‑market share buy‑back program for its ordinary fully paid shares. The company reported that a cumulative 229,761,763 shares had been repurchased pr...
Telstra Updates Market on Progress of On‑Market Share Buy‑Back
May 25, 2026
Telstra Group Limited has issued an updated notification to the ASX regarding its ongoing on‑market share buy‑back program for ordinary fully paid shares. The company reported that it had repurchased a cumulative 226,819,934 shares pri...
Telstra Updates Market on Progress of On-Market Share Buy-Back
May 22, 2026
Telstra Group Limited has provided an update on its on-market share buy-back program for its ordinary fully paid shares listed on the ASX under the code TLS. The company reported that, as of the latest notification, a total of 221,327,439 shares h...
Telstra Cancels Nearly 25 Million Shares in On-Market Buy-Back
May 21, 2026
Telstra Group Limited has cancelled 24,967,285 ordinary fully paid shares following completion of an on-market share buy-back, effective 19 May 2026. The reduction in issued capital may enhance earnings per share and reflects ongoing capital manag...
Telstra Issues Daily Update on On‑Market Share Buy‑Back
May 13, 2026
Telstra Group Limited has provided an update on its on‑market share buy‑back program involving its ordinary fully paid shares listed under the ASX code TLS. The company reported that, as of 13 May 2026, it had repurchased a cumulative ...
Telstra Updates Market on Progress of Ongoing On‑Market Share Buy‑Back
May 12, 2026
Telstra Group Limited has provided an updated notification to the ASX regarding its ongoing on-market share buy-back of ordinary fully paid shares. The update, dated 12 May 2026, confirms that a cumulative 215,636,396 shares had been repurchased b...
Telstra Updates Market on Ongoing On‑Market Share Buy‑Back
May 11, 2026
Telstra Group Limited has continued its on‑market share buy‑back program, confirming a further daily repurchase of ordinary fully paid shares under its capital management strategy. The latest notification to the ASX reports that the co...
Telstra Updates Market on Ongoing On‑Market Share Buy‑Back
May 8, 2026
Telstra Group Limited has provided an updated notification to the ASX regarding its ongoing on‑market share buy‑back program for its ordinary fully paid shares. The company reported that as of the latest update, a cumulative 211,637,22...
Telstra Updates Market on Progress of Ongoing Share Buy-Back
May 5, 2026
Telstra Group Limited has issued an updated notification to the ASX regarding its ongoing on‑market share buy‑back of ordinary fully paid shares. The program, initially notified in August 2025, continues to reduce the company’s s...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.