Earlier today, the Telstra Group Ltd (ASX: TLS) share price hit a new 52-week high of $4.24.
Investors have been buying the telco giant's shares this week following the release of its half year results.
Telstra reported a result a touch ahead of expectations with its 6.4% increase in total income to $11.6 billion and 11.4% jump in EBITDA to $3.9 billion. This allowed the Telstra board to increase its fully franked interim dividend by 6.3% to 8.5 cents per share.
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Can the Telstra share price keep rising?
The good news is one leading broker believes the Telstra share price can keep rising from here.
A note out of Morgans reveals that its analysts have retained their add rating with an improved price target of $4.70.
Based on the current Telstra share price of $4.22, this implies potential upside of over 11% for investors over the next 12 months.
In addition, Morgans is now expecting a 17 cents per share fully franked dividend in FY 2023. This equates to a 4% yield and boosts the total potential return beyond 15%.
What did the broker say?
Morgans was pleased with Telstra's result and believes it is well-placed to deliver achieve its earnings guidance in FY 2023. It said:
Doubling 1H23 underlying EBITDA gets most of the way to the bottom end of the guidance range. Given the business has positive earnings momentum, guidance looks comfortably achievable, in our view.
And with the mobile market in good shape and potential asset divestments on the horizon, Morgans is positive on the future. It adds:
Telco has the strongest tailwinds in a decade with an increasingly rational market, price rises across the majors and the criticality of telco increasingly recognised. The last major mobile operator Vodafone/TPG increased mobile prices by ~$5 per month in January 2023 and all key players are behaving economically rational.
This combines with catalysts including the potential for InfraCo value release following the legal restructure. Add retained, TP increased to $4.70.
