It was a good month for Telstra shareholders…
The post Here’s what happened to the Telstra (ASX:TLS) share price in September appeared first on The Motley Fool Australia. –
The Telstra Corporation Ltd (ASX: TLS) share price was a relatively positive performer in September.
The telco giant’s shares pushed 2.3% higher over the month. This compares to a 2.6% decline by the S&P/ASX 200 Index (ASX: XJO) over the same period.
This latest gain means the Telstra share price is now up 29% in 2021.
Why did the Telstra share price push higher last month?
The catalyst for the rise in the Telstra share price in September was the release of its investor day update in the middle of the month. At the event, the telco giant unveiled the T25 strategy that will replace its highly successful T22 strategy at the end of FY 2022.
Telstra’s CEO, Andrew Penn, highlighted that T22 was based on transforming the company, whereas T25 will be about driving growth.
He revealed that Telstra will aim for sustained growth and value by targeting mid-single digit underlying EBITDA and high-teens underlying earnings per share compound annual growth rates (CAGR) from FY21 to FY25.
Commenting on the future, the CEO said: “Through T22 we have set the foundation for our future success. We have simplified our operations and products, improved customer experience and reduced our cost base and our InfraCo plans are well progressed, helping us deliver value to shareholders. While T22 has been a success, we have more to do. We are determined to finish the job.”
“Today’s announcement of T25 marks our transition from transformation to growth, from a strategy we had to do, to a strategy we want to do to focus on growth. It is a strategy that builds on the strong foundations we have built over the last three years and remains focussed on what matters most – our customers, our people, our shareholders and on supporting the creation of a vibrant digital economy for Australia,” Mr Penn added.
Is it time to invest?
The good news is that this update went down well with brokers. One of those was Morgans. In response to the update, the broker retained its add rating and lifted its price target to $4.44.
Based on the current Telstra share price of $3.89, this implies potential upside of 14% over the next 12 months.
In addition, the broker is forecasting a 16 cents per share dividend again in FY 2022. This will mean an attractive fully franked 4.1% yield for investors, which stretches the total potential return to over 18%.
Should you invest $1,000 in Telstra right now?
Before you consider Telstra, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Telstra wasn’t one of them.
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*Returns as of August 16th 2021
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.