Why the Telstra (ASX:TLS) share price stormed 14.5% higher in November

The Telstra Corporation Ltd (ASX:TLS) share price was a strong performer in November. Here's why it jumped 14.5% higher during the month…

| More on:
rising ASX Telstra share price represented by man jumping in the air for joy looking at mobile phone

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Telstra Corporation Ltd (ASX: TLS) share price was a strong performer in November.

Over the month, the telco giant's shares stormed 14.5% higher.

Why did the Telstra share price zoom higher?

Investors were fighting to get hold of Telstra's shares last month for a couple of reasons.

The first was due to improving investor sentiment thanks to COVID-19 vaccine progress.

This has sparked hopes that travel markets will recover quicker than previous expected, which would be good news for Telstra. Its revenues have taken a small hit this year from the lack of roaming revenue.

In addition to this, the company made a major announcement in the middle of the month relating to its structure. Telstra revealed that it is looking to restructure the company to create three separate legal entities.

The restructure will see Telstra split up into InfraCo Fixed, InfraCo Towers, and ServeCo.

Telstra's CEO, Andrew Penn, believes the restructure would enable the company to take advantage of potential monetisation opportunities for its infrastructure assets which could create additional value for shareholders.

Mr Penn explained: "The proposed restructure is one of the most significant in Telstra's history and the largest corporate change since privatisation. It will unlock value in the company, improve the returns from the company's assets and create further optionality for the future."

"The challenges and disruptions of the last 6-12 months have reinforced the increasing value of infrastructure assets globally; the importance of the digital economy, not only to business but to the whole of Australia and its economic recovery; and the dependence of the digital economy on telecommunications as its platform," he added.

The reaction.

This plan went down well with a number of brokers, with many buy ratings being reaffirmed by analysts.

UBS expects the spin off to crystalise value and retained its buy rating and $3.70 price target. Elsewhere, Credit Suisse feels the same way and retained its outperform rating and $3.85 price target.

And finally, Goldman Sachs reiterated its buy rating and $3.75 price target on its shares.

In addition, all three brokers are forecasting the company to pay a 16 cents per share dividend in FY 2021 and FY 2022.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

A man looking at his laptop and thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a disappointing hump day session for the ASX today.

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX managed to bank a small rise this Tuesday.

Read more »

Sport trainer talking to little girl who is climbing wooden ladder in gym.
Share Gainers

Why Vault Minerals, Droneshield, Westgold Resources shares are climbing higher today

These shares are gaining on Tuesday, but why?

Read more »

A young woman smiles as she rides a zip line high above the trees.
Financial Shares

5 best ASX 200 financial shares of FY25 (CBA didn't make the cut!)

These stocks were well and truly 'in the black' for share price growth last financial year.

Read more »

Excited group of friends sitting on sofa watching sports on TV and celebrating.
Share Gainers

Why Amaero, Black Cat, Domino's, and Ramelius shares are racing higher today

These shares are having a good session on Tuesday. But why?

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a rough start to the trading week for investors this Monday.

Read more »

two computer geeks sit across from each other with their laptop computers touching as they look confused and confounded by what they are seeing on their screens.
Share Gainers

ASX tech shares outperformed US tech stocks by 2:1 in FY25. Here's why

Forget the Magnificent 7! Aussie tech shares had twice as much price growth as US tech stocks in FY25.

Read more »

Three happy office workers cheer as they read about good financial news on a laptop.
Share Gainers

Why Bellevue Gold, Cobram, Hub24, and Nanosonics shares are pushing higher

These shares are starting the week on a positive note. But why?

Read more »