It has been a disappointing start to the week for the Telstra Corporation Ltd (ASX: TLS) share price.
The telco giant's shares started the week with a decline of over 2.5% to $3.02.
Why did Telstra's shares tumble lower today?
While I suspect that some of today's decline could be attributed to profit taking after a strong rally in its share price over the last month, an update from NBN Co on Friday could also have weighed on its share price performance today.
According to the NBN's Corporate Plan for 2019-22, in FY 2019 it expects ~1.2 million brownfield premises to be activated compared to the 1.5 million brownfield activations achieved in FY 2018.
Telstra responded to this news by saying that it "will assess the effect of the nbn co Corporate Plan 2019 on its outlook for FY19 and advise the market once that assessment is complete."
One broker that has beat Telstra to the punch is Goldman Sachs. A note out of the broker this morning reveals that it expects the telco company to have to revise its FY 2019 guidance to account for the lower than expected brownfield activations.
According to the note, it estimates that Telstra's NBN one-off EBITDA range of $1.8-1.9 billion suggests that it expected the number of brownfield activations in FY 2019 to be between 0% and 5% higher year on year. Whereas it will actually be a decline of around 20%.
In light of this, the broker suspects that Telstra will revise its one-off NBN earnings down from $1.8-1.9 billion to ~$1.4-1.5 billion.
The broker has, however, reminded investors that this is timing-related and payments will merely be shifted out to a later date. In fact, the news could be seen as a small positive for the telco giant as a slower NBN rollout allows it to retain its wholesale earnings and higher margin copper customers for longer.
For similar reasons the broker sees this as a minor positive for both TPG Telecom Ltd (ASX: TPM) and Vocus Group Ltd (ASX: VOC).
Should you buy the dip?
Goldman appears to believe this is a buying opportunity. The broker thinks investors should not be spooked by a revision to its NBN EBITDA and instead should focus on the bigger picture.
As a result, it has maintained its buy rating and $3.60 price target on Telstra's shares.
