The Telstra Corporation Ltd. (ASX: TLS) share price has had a pretty stellar week. After starting the week trading hands at $3.42 per share, the Telstra share price has rocketed up to close at $3.56 on Friday, a solid weekly return of over 4%. This caps off an even better six months for the telco giant. Around Christmas last year, shares were hitting lows of $2.74, which would give a (lucky) investor a return of almost 30% if they had bought shares during this dip.
So at a 52-week high, how much upside does Telstra have left? And, more importantly, is it too late to buy Telstra shares?
A refresher on Telstra
Telstra is Australia's largest provider of both mobile and fixed telecommunications services for both business and individual customers.
I have long liked Telstra as a company – a solid brand name and unbeaten network coverage gives the company a significant competitive advantage, or 'moat' over its competitors such as Optus, TPG Telecom Ltd (ASX: TPM) and Vodafone Australia. This is evidenced by Telstra's position as the clear market leader in industry – the company holds a 48% market share in mobile service subscriptions, as well as an estimated 50% market share in wholesale and commercial services.
This 'moat' hails from the days when Telstra (or PMG/Telecom back then) was a government-owned monopoly supplier of telephony services.
Even though it was privatised in the 1990s, Telstra still retains a lot of infrastructure from that period and residual capital has allowed it to invest heavily in maintaining a competitive advantage over the last two decades. Although Telstra's share price has been smashed by the NBN rollout over the last 3-4 years (it traded for over $6.60 in 2015) and its dividend has been cut, Telstra is heavily investing in its 5G network, which many experts think will bring about the next boom in internet innovation.
Is it too late to buy in?
This is part of the reason why US investment bank Goldman Sachs has lifted its price target for Telstra to $3.90 for 2019. This implies a further upside of almost 10% on today's prices. The news that TPG and Vodafone have been blocked from merging by the ACCC further adds to this upside. The lack of a stronger competitor to Telstra is obviously good news for the company long-term.
Foolish takeaway
Many investors remain bullish on Telstra's share price for 2019 and so it may not be too late to buy Telstra shares at this point. Regardless of the profitability of 5G, Telstra remains a solid business that will continue to provide a huge chunk of internet services in Australia (which isn't going to go away anytime soon). With a current yield of 4.21% (before franking), Telstra remains a reliable income stock and there are worse places to put your money, in my opinion.
