The Telstra Corporation Ltd (ASX: TLS) share price is finally heading in the right direction again.
In late morning trade the telco giant's shares are up 2.5% to $3.51.
Why are its shares higher?
This morning Telstra's shares were given a boost from a positive research note out of the equities desk of Macquarie.
According to the note, the broker has upgraded Telstra's shares from neutral to an outperform rating with a $3.70 price target.
Its analysts have made the move following Telstra's earnings revision which was released at the end of last week in response to the NBN ceasing HFC sales for 6 to 9 months.
Although the telco giant has downgraded its earnings for FY 2018, the NBN delays are expected to be modestly financially positive to Telstra over the full rollout due to the effects of a natural hedge
Macquarie appears to see things this way as well, believing that the dividend is reasonably safe due to NBN payments. Its analysts also feel that the yield on offer should add support to its share price moving forward.
Macquarie's price target implies potential upside of 6% for Telstra's shares. Whilst this is not the biggest potential share price gain available on the market, when you include its generous dividend it becomes much more attractive.
Furthermore, a note out of Deutsche Bank rates Telstra as a buy with an even greater price target of $4.04.
Should you invest?
While an investment in Telstra is no longer as predictable and low risk as it once was, I still believe it provides investors with a lot of value at the current share price. However, it certainly isn't for the fainthearted.
The same could arguably be said for investments in TPG Telecom Ltd (ASX: TPM) and Vocus Group Ltd (ASX: VOC) at today's share prices.
