Is the Telstra (ASX:TLS) share price going to keep rising?

Can the Telstra Corporation Ltd (ASX:TLS) share price keep growing after rising by 11% over the last few weeks?

| More on:
map of australia with golden 5G sitting on it representing telstra share price profit result

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

Can the Telstra Corporation Ltd (ASX: TLS) share price keep going higher? It has gone up more than 10% since 11 March 2021.

The telco has been rising as it continues to progress with its strategies.

5G

One of the main parts of the strategy is to be the market leader of 5G. This is the next phase of mobile technology that should allow for much faster speeds than we already have.

To that end, Telstra recently invested $277 million to secure 1000 MHz in the 26 GHz spectrum auction. It secured spectrum in all major capital cities and regional areas where it was sold.

The Telstra CEO Andrew Penn said that the new mmWave spectrum would "dramatically" increase capacity and speeds for Telstra customers.

Why is the mmWave spectrum so important? Mr Penn said:

mmWave spectrum is especially good at providing high-speed mobile broadband in high-density areas, such as built up cities and towns, train stations, sports stadiums and other locations with a high concentration of people using their mobile devices.

The Telstra CEO also said that the additional capacity would enable the mobile network to be used more effectively for 5G broadband in the home, providing another way to deliver fast and reliable internet where the current fixed connection may not meet a customer's needs.

If Telstra can convince a good number of NBN customers to switch over to 5G broadband at home, then it could lead to higher margins for each home connection.

How is the profit going?

Telstra's profit continues to decline. In the FY21 half-year result, total income decreased 10.4% to $12 billion and net profit after tax (NPAT) decreased 2.2% to $1.1 billion. Reported earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 14.7% to $4.1 billion.

Competition in the mobile sector is still impacting the business, though it was able to add 80,000 retail postpaid handheld services during the period.

Cost cutting continues to be an important part to ensure the business remains as profitable and efficient as possible The T22 cost reduction target has been increased to $2.7 billion by FY22.

It's also targeting mid to high single digit growth in underlying EBITDA in FY22 and $7.5 billion to $8.5 billion of underlying EBITDA in FY23.

One of the main ways that Telstra is helping shareholder returns is with its consistent 8 cents per share dividend every six months. That equates to a grossed-up dividend yield of 6.75%.

It's also planning to commence the process for external investment in its InfraCo Towers division early in the first quarter of FY22. Telstra has restructured its business to create more transparency, increase focus across its operating businesses and enable long-term valuation realisation from its infrastructure businesses.

Time to jump on Telstra the share price?

Brokers are generally a fan of Telstra shares. Morgan Stanley rates Telstra as a buy with a share price target of $4 for the next 12 months.

The broker likes the restructuring of the business because each division can focus on what's best for the segment. However, competition remains a detractor for Telstra being able to generate organic (revenue) growth.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Industrials Shares

Two male ASX 200 analysts stand in an office looking at various computer screens showing share prices.
Broker Notes

Macquarie tips 20% upside for this ASX 200 industrials stock

Let's see what the broker is saying about this stock following an update.

Read more »

a woman holds her hands to her temples as she sits in front of a computer screen with a concerned look on her face.
Industrials Shares

Guess which ASX 200 stock is crashing 24% on results day

Investors were not impressed with this result. But why?

Read more »

A man looking at his laptop and thinking.
Industrials Shares

Which ASX 200 industrials stock does Macquarie expect to sink 40% over the next 12 months?

Can this name build it's way out of such negative sentiment?

Read more »

Shocked office worker staring at computer screen with colleagues working in the background.
Industrials Shares

ASX 300 stock falls on shock founder CEO exit

A change of leadership has been announced.

Read more »

Male and female workers at a steel factory.
Industrials Shares

4 reasons this $10 billion ASX 200 stock can keep charging higher into 2026

A leading expert forecasts ongoing earnings growth for this top ASX 200 stock.

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
Industrials Shares

Why this ASX 200 stock could rocket 36% despite Trump tariff headwinds

A top broker forecasts this global ASX 200 industrial share could surge 36%. But why?

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Dividend Investing

Top broker forecasts this quality ASX 200 dividend share could surge 45%!

A leading broker forecasts outsized gains ahead for this high-yielding ASX 200 dividend stock.

Read more »

Australian notes and coins symbolising dividends.
Industrials Shares

ASX 200 dividend stock reveals next quarterly passive income payout

The ASX 200 dividend stock announced its quarterly results and latest passive income payout.

Read more »