With $2.4 billion in FY26 profits, are Telstra shares a good buy today?

Telstra Group Ltd (ASX: TLS) shares are marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) telco closed yesterday trading for $4.77. In late morning trade on Wednesday, shares are changing hands for $4.80 apiece, up 0.7%.

For some context, the ASX 200 is up 0.1% at this same time.

Taking a step back, Telstra shares have also modestly outperformed the benchmark index over the past year, with the ASX 200 down 1.5% in 12 months while Telstra stock has slipped a lesser 0.5%.

And we shouldn’t discount the passive income Telstra stockholders receive.

Over the last 12 months, Telstra has paid out two dividends, both franked at 90%, totalling 21 cents a share. The ASX 200 telco currently trades on a 4.4% trailing dividend yield.

Which brings us back to our headline question.

With the company’s full-year FY 2026 profits climbing to $2.4 billion, should you buy shares today?

Telstra shares: Buy, hold, or sell?

Red Leaf Securities’ John Athanasiou recently ran his slide rule over the ASX 200 telco (courtesy of The Bull).

“Telstra provides relatively defensive earnings and reliable cash flow during what has been a volatile period for equity markets,” he said.

Commenting on the company’s growth in FY 2026, Athanasiou noted:

Reported net profit after tax of $2.4 billion in full year 2026 was up 2.7 per cent on the prior corresponding period. Reported earnings per share of 19.9 cents were up 5.3 per cent. The company announced a further on-market share buyback of up to $1 billion in full year 2027 when releasing its full year results in August.

The mobile division remains the key earnings driver, while infrastructure assets add stability.

Connecting the dots, Athanasiou issued a hold recommendation on Telstra shares.

“However, expectations are already reflected in the share price, and recent network service concerns create reputational risk,” he said. “Hold for income rather than substantial near term capital growth.”

What’s happening with the new $1 billion share buyback?

Telstra released its FY 2026 results on 13 August.

After completing the previous $1.25 billion on-market share buyback in June, the company announced a new buyback of up to $1 billion on the day.

Commenting on the share buyback, Telstra CEO Vicki Brady said:

Buy-backs allow us to lower our cost of capital and manage our sources of funding more efficiently. This approach also supports earnings and dividend per share growth and, together with increased dividends, demonstrates our confidence in our financial strength and outlook.

Despite that news, Telstra shares closed down 3.2% on the day of the results release.

The post With $2.4 billion in FY26 profits, are Telstra shares a good buy today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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.