Full-year earnings preview:
Telstra (TLS) is Australia's largest telecommunications provider offering fixed-line internet services, mobile phones, mobile networks as well as pay television (Foxtel) in a joint venture with News Corporation. It reports its full-year numbers on the 13th of August.
Telstra is one of the few defensive stocks to have benefitted from the impact of the Coronavirus. Social distancing and lockdown measures have driven a huge increase in internet and data usage due to a sharp acceleration towards digitization in activities like telehealth, online learning, remote working, and e-commerce.
Rationalisation within the Australian telecommunications landscape is resulting in less aggressive price competition. Along with cost-cutting within Telstra and no foreseeable end to rolling lockdowns and travel restrictions, the medium-term outlook for Telstra is as appealing as it has been for many years.
In the current environment of low-interest rates and vastly reduced dividends, Telstra offers investors an attractive fully franked 4.7% dividend yield. Consensus statutory EPS estimate is around 46 cents per share, with total income expected to be in the range of $25.3 to $27.3 billion and underlying EBITDA in the range of $7.4 to $7.9 billion.
Technically, Telstra is trading within an upward sloping trend channel following the March $2.87 low and the rally displays corrective characteristics. Solid resistance is viewed $3.55/$3.60 area with a break/close above here needed to signal a rally towards $4.00 is underway. On the downside, buyers would be expected to support prices on dips towards the $3.30/$3.20 area.
Source Tradingview. The figures stated areas of the 31st of July 2020. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.