Telstra shares: Buy, hold, or fold?

It’s been a rough few decades for the share price of Telstra Corporation Ltd (ASX: TLS) – which is currently trading under the name Telstra Group Ltd and ticker code TLSDA.

The company is in the middle of a restructuring operation, shaking up its business right down to its ASX listing, as The Motley Fool’s Sebastian reports.  

The move comes after the stock dumped around 50% of its value over 23 years. It’s fallen from around $9 per share in 1999 to trade at $3.795 today.

That’s also 10% lower than it was at the start of 2022. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has also fallen around 10% year to date.

So, with the stock having tumbled recently and a restructuring operation in progress, is now a good time to buy Telstra shares? Let’s see what experts think.

Is now a good time to buy Telstra shares?

Many experts are optimistic about the Telstra share price going forward. Though, not all would go so far as to rate it a buy.

Top broker Goldman Sachs, for one, has a neutral rating on the telecommunications giant. But it has slapped Telstra shares with a $4.40 price target, representing a potential 15% upside.

Bell Potter Securities advisor Chris Watt has also tipped the telco as a hold, noting its earnings are resilient. Watt said, courtesy of The Bull:

The future sale of its infrastructure assets is the next key catalyst in determining the strategic direction of the business going forward.

Telstra’s restructure will see the business split into four pillars: ServeCo, InfraCo Fixed, Amplitel, and Telstra International.

Back in August, the company’s chief financial officer Vicki Brady said the restructure will give the company the option to monetise the InfraCo business. Though, no sale has been decided upon.

JP Morgan believes selling a 49% stake in the asset could reap between $12 billion and $17 billion of after-tax profit, the Australian Financial Review reports.

Under such circumstances, $10.5 billion to $15.5 billion could be returned to shareholders, most likely through buybacks, the broker reportedly said. Such buybacks could, in turn, boost the telco’s dividends by 9%.

Speaking of dividends, Morgans is tipping Telstra to pay out 16.5 cents per share this financial year and next, my Fool colleague James reports.

That’s in line with the company’s financial year 2022 full-year offering. Though, that included three cents per share of special dividends.

Morgans is particularly bullish on Telstra shares, slapping the stock with an add rating and a $4.60 price target. That represents a potential 21% upside.

The post Telstra shares: Buy, hold, or fold? appeared first on The Motley Fool Australia.

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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs and JPMorgan Chase. The Motley Fool Australia has positions in 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 Scott Phillips.

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