Telstra share price ‘hasn’t fully captured the upside in value’: fundie

The Telstra Group Ltd (ASX: TLS) share price is slightly in the green today, but could it have even more upside potential in the future?

Telstra shares are up 0.25% at the time of writing and are currently trading at $4.01 apiece. For perspective, the S&P/ASX 200 Index (ASX: XJO) is falling 0.46% today.

Let’s take a look at the outlook for this ASX communication share.

What’s ahead for Telstra?

Perpetual Asset Management has named Telstra as one of three “resilient stocks” with pricing power.

Analysts are particularly positive on Telstra’s exposure to InfraCo assets. Telstra created InfraCo as a standalone business with the entity building a national fibre network for internet connectivity. Commenting on Telstra InfraCo, analysts said:

We believe the stock hasn’t fully captured the upside in value for the Infraco assets, and as such we see some downside protection.

Further, Telstra carries far less debt relative to earnings than many other infrastructure-like exposures. As such a partial (or even full) selldown of Infraco assets would see significant sums returned to shareholders through capital management.

InfraCo fixed delivered $2.4 billion of income for Telstra in the 2022 financial year. NBN recurring receipts lifted 3.3%. As Telstra highlighted in its AGM in October, InfraCo’s fixed growth is tipped to be further supported in the future by the inter-city fibre project announced in February.

Analysts at Perpetual also touted Telstra’s mobile network, amid Optus and TPG challenges. Perpetual said:

One stock held by some Perpetual funds is Telstra.

We are attracted to Telstra’s market leading mobile position. Competitors Optus and TPG are dealing data privacy and integration challenges, which ought to provide Telstra an opportunity to capitalise on their already strong subscriber momentum.

Telstra’s mobile business contributed $700 million to EBITDA growth in the 2022 financial year.

Share price snapshot

The Telstra share price has descended 1.1% in the past year. In the last month, Telstra shares have climbed just over 2%.

For perspective, the ASX 200 has lost nearly 1% in the past year.

Telstra has a market capitalisation of more than $46 billion based on the current share price.

The post Telstra share price ‘hasn’t fully captured the upside in value’: fundie appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea 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 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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