The stock of Deutsche Telekom AG (DE:DTE) has received Buy ratings from analysts, which indicates further upside potential in the share price. These ratings were mainly driven by its Q2 2023 earnings reported last week. Overall, analysts have rated the stock as a Strong Buy with more than 40% expected growth in the shares.
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In 2022, the company achieved a remarkable level of outperformance, not only in its financial performance but also in its share price trajectory. In 2023, the share price faced some volatility and has gained just 3.47% YTD. In June 2023, the share tumbled significantly over the news of the prospect of Amazon.com, Inc. (NASDAQ:AMZN) entering the mobile telephony sector.
Deutsche Telekom is a leading telecommunications company in Europe that offers an extensive range of products and services, including fixed-line, mobile, internet, and IPTV solutions.
Let’s take a look at the details.
Strong Earnings
The company reported solid performance in its first half earnings, well supported by growth across all its business segments and strict cost control measures. The EBITDA grew by 1.5% to €10.0 billion, which was above the consensus estimate. The company again revised its 2023 projections and now expects its earnings to reach around €41.0 billion (compared to the previous estimate of €40.9 billion), signifying year-over-year growth of 4%. The service revenue for the first half grew by 2.5% to €45.8 billion.
Recent Ratings
Over the last seven days, the stock has received Buy rating confirmations from multiple analysts. Analysts remain bullish on the stock considering the company’s dominant position in the industry and its powerful pricing power. The company’s robust cash flow position and its stable dividends provide makes the investment case more appealing to investors. In H1 2023, the company reported a free cash flow of €6.5 billion, 8.6% above the last year’s number.
Yesterday, analyst Andrew Lee from Goldman Sachs confirmed his Buy rating, predicting a good upside potential of 43% in the share price.
On the same day, J.P. Morgan analyst Akhil Dattani also recommended Buying this stock at a forecast of more than 50% growth in the share price.
Prior to this, analysts at Citi, Barclays, UBS, Deutsche Bank, etc. have also maintained their Buy ratings on the stock.
Is Deutsche Telekom Stock a Buy?
Based on all 10 Buy recommendations, DTE stock has a Strong Buy rating on TipRanks. The average target price is €26.74, which represents a favorable change of over 40% in the share price.
