This telco giant’s shares are on fire in 2021…
The post Telstra (ASX:TLS) share price hits 52-week high: Can it go higher? appeared first on The Motley Fool Australia. –
The Telstra Corporation Ltd (ASX: TLS) share price has been a very strong performer in 2021.
In fact, the telco giant’s shares are currently sitting at a 52-week high of $3.79.
This means the Telstra share price is now up 26% since the start of the year.
Why is the Telstra share price at a 52-week high?
There have been a number of catalysts for the rise in the Telstra share price in 2021. Chief among them is the company’s improving outlook thanks to its leadership position in 5G internet, its cost cutting and simplification plans, rational competition, and potential asset monetisation.
The sum of the above means Telstra’s outlook has improved to such a level that concerns over dividend cuts are now over and growth is being talked about for the first time in years.
In February, Telstra’s CEO, Andy Penn commented: “After a decade of disruption following the creation of the nbn, and with its rollout now declared complete, we can clearly see the path to underlying growth ahead of us.”
“Our investment in innovation and technology, digitisation and networks, improving our customer experience and being disciplined in our capital management, mean that at the start of this decade, as Australia digitises its economy, Telstra is in a strong position to grow,” he added.
Asset monetisation begins
The Telstra share price was given a boost last week when its asset monetisation plans came to fruition.
Telstra revealed that it has sold a 49% interest in Telstra InfraCo Towers to the Future Fund, Commonwealth Superannuation Corporation, and Sunsuper.
The company expects to receive $2.8 billion after transaction costs, with approximately 50% of net proceeds from the sale set to be returned to Telstra shareholders in FY 2022.
Is it too late to invest?
Analysts at Goldman Sachs believe the Telstra share price is still good value despite its strong rise.
It currently has a buy rating and $4.20 price target on its shares. Based on the latest Telstra share price, this implies a potential ~11% return over the next 12 months.
And if you include the fully franked dividends of 16 cents per share it is forecasting through to FY 2023, before a long-awaited increase to 18 cents per share in FY 2024, this potential return stretches to over 15%.
Should you invest $1,000 in Telstra right now?
Before you consider Telstra, you’ll want to hear this.
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*Returns as of May 24th 2021
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.