The Telstra Corporation Ltd (ASX: TLS) share price continues to climb. It has gone on a winning run in 2021 to date and that run continued in November 2021.
Telstra shares rose 6% in November. The business has seen a rise of 34% since the beginning of the calendar year.
The telco has made a number of strategic announcements in 2021.
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What announcements were made in November 2021?
The latest major market sensitive announcements from Telstra came in September and October.
But there was one announcement that represented over a $1 billion of revenue to Telstra.
The telco announced an agreement to renew its contract with the Australian Department of Defence to deliver critical network and telecommunications services.
This five-year contract, worth over $1 billion, will see Telstra continue to provide "leading-edge technology and telco solutions". It is the largest ever customer contract of its kind signed by Telstra Enterprise and contributes to Telstra's goal of returning the Enterprise business to growth.
But as mentioned, Telstra has made two announcements in recent months that investors may be factoring into the Telstra share price.
Digicel Pacific and T25
For the last few years, Telstra has been working on its T22 strategy. That timeline is almost over, so now Telstra is looking at its aims over the next few years.
5G is the next important stage of mobile phone development, so Telstra is looking to extend its coverage to 95% of the population.
Telstra wants to grow its Telstra Plus membership to 6 million by FY25. The telco is also aiming to achieve compound annual growth of underlying earnings before interest, tax, depreciation and amortisation (EBITDA) in the mid-single digits and earnings per share (EPS) in the high-teens to FY25.
Other goals includes reducing its net fixed costs by another $500 million by FY25 and maximising fully franked dividends, seeking dividend growth over time.
Telstra has essentially committed to paying at least a $0.16 annual dividend, which translates to a grossed-up dividend yield of 5.6%.
At the end of October 2021, Telstra announced it was buying the South Pacific telco Digicel for US$1.6 billion, plus up to US$250 million depending on how the business performs. Telstra only had to contribute US$270 million of the equity thanks to support from the Australian government through a combination of non-recourse debt facilities and equity-like securities.
In the year to 31 March 2021, Digicel Pacific generated EBITDA of US$233 million.
After its good run, is the Telstra share price a buy?
Plenty of brokers think that Telstra shares are still reasonably attractive.
For example, Credit Suisse rates Telstra as a buy with a price target of $4.40. The broker thinks Telstra shares are currently valued at 24x FY23's estimated earnings.
