Should I invest $5,000 in Telstra shares before the end of May?

Telstra Group Ltd (ASX: TLS) shares have dipped further into the red on Thursday morning.

At the time of writing, the shares have slumped 0.36% to $5.47 a piece. The decline follows a 1% drop on Wednesday.

The telecoms provider’s shares have had a good rally so far in 2026, however. The shares are up 12% year to date and 17% higher than this time last year.

Many are questioning whether the shares are now cooling or if there is still an upside ahead.

So, should I invest $5k in Telstra shares before the end of the month?

Market Index data shows brokers still rate the telco’s shares as a buy, but they tip an average 3% downside to $5.33 over the next 12 months, at the time of writing. 

TradingView data shows a similar analyst view. Of 15 ratings, only 4 have a strong buy stance, and another 11 have a hold rating. They have an average target price of $5.26, which implies a 4% downside over the next 12 months.

Either way, it doesn’t look like we’ll continue to see the same level of gains in Telstra shares that we’ve seen recently.

In fact, if these forecasts are correct, investors who buy $5,000 of Telstra shares today could soon be looking at a loss.

Here’s why.

What’s the latest from Telstra shares?

It looks like after this year’s share price rally, analysts view Telstra shares as fully valued. Or even perhaps a little overvalued.

Analysts at Catapult Wealth also recently highlighted that while mobile price rises are expected to support Telstra’s revenue growth this year, there is uncertainty around spectrum license fees, which could remain a medium-term headwind for the company.

But upsides and potential target prices aren’t the only reasons investors should consider holding Telstra shares.

What about the telco’s passive income play?

Telstra is a dominant Australian telecommunications company. It owns and operates the nation’s largest mobile network and is a major fixed-line internet provider. And this makes it a classic passive income play.

The necessity of the internet and mobile phones means the company is well-positioned to perform well, regardless of the stage of the economic cycle or how the ASX is faring overall.

Telstra’s defensive nature also means it can pay shareholders a consistent, reliable passive income. 

The telco most recently paid its interim dividend of 10.5 cents per share, 90.48% franked, in March. The telco is forecast to pay a total dividend of 21 cents for FY26 (up from 19 cents in FY25). This translates to a forward dividend yield of around 3.9% excluding franking credits, at the time of writing. 

The post Should I invest $5,000 in Telstra shares before the end of May? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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 has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.