Is Telstra stock a buy at $5.37 a share?

Late last month, amid all of the chaos of the Iran war, something extraordinary happened on the ASX. More specifically, with Telstra Group Ltd (ASX: TLS) stock.

On 24 March, shares of this ASX 200 telco hit a new 52-week high. Not only was it a new 52-week high, but the highest Telstra stock has traded at in many years. Yep, last Tuesday saw Telstra shares top $5.37 each. We haven’t seen that kind of pricing on this telco since at least early 2017. That means Telstra was at a nine-year high a week ago.

Today, Telstra stock has cooled off a little, but is still at $5.32 at the time of writing. That puts the company at an impressive year-to-date gain of 9.45% for 2026, and up 24.8% over the past 12 months.

Telstra is a strong and mature ASX 200 blue-chip stock. But gains of this magnitude prompt us to wonder whether the telco is still a good deal at $5.37 a share. Or indeed, at today’s $5.32.

So let’s talk about that.

Is Telstra stock a buy at $5.37?

That’s a tough question for investors to consider. Telstra, as we’ve already established, is a high-quality company that dominates its sector and shows characteristics of possessing a wide economic moat.

It is also growing at a slow-but-steady pace. The company’s most recent earnings, released in February, showed Telstra growing its reported earnings per share (EPS) by 11% to 9.9 cents, as well as its underlying net profits after tax by 10% to $1.2 billion.

Investors have to consider whether Telstra’s future growth trajectory is enough to justify its current share price, though. At today’s price, Telstra stock trades at a price-to-earnings (P/E) ratio of 26.6.

That’s not ridiculous, but it’s arguably not cheap either. For comparison, that’s about the same earnings multiple that Google-owner Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) is currently at.

But what about Telstra stock’s dividends? After all, many investors just buy this telco for its famously large and dependable income cheques.

Well, Telstra’s galloping share price over recent months has indeed come with the unfortunate consequence of reducing Telstra’s dividend yield. Investors were perhaps used to a yield well over 4% until Telstra went on this stock price surge. Today, the company is trading with a yield of about 3.8%.

That’s certainly not as attractive as it once was. Particularly so if we consider that one can obtain a safer 5% yield with a cash investment like a term deposit these days.

Brokers still call buy

Saying that, some ASX brokers still think Telstra is a buy today. Last week, my Fool colleague covered the outperform rating that Macquarie’s brokers gave Telstra shares. Macquarie thinks the recently announced price increases on Telstra’s mobile offerings bode well for the company’s future and dividends. The broker has set a 12-month stock price target of $5.64 per share for Telstra.

Let’s see if Macquarie is on the money there.

The post Is Telstra stock a buy at $5.37 a share? appeared first on The Motley Fool Australia.

More reading

• 3 must-own ASX dividend shares which belong in every portfolio
• 5 reasons why I’d buy Telstra shares for passive income
• Telstra just hit a 10-year high. Has this ASX income giant still got more to give?
• How to build a defensive ASX share portfolio in 2026
• 3 blue-chip ASX dividend shares to buy and hold

Motley Fool contributor Sebastian Bowen has positions in Alphabet. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group and Telstra Group. The Motley Fool Australia has recommended Alphabet. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.