Investors in the Telstra Group Ltd (ASX: TLS) share price were having a rough few months. That was until Telstra's arch-rival Optus had its little incident this week. Since the start of Wednesday's trading, Telstra shares have put on more than 2%. It might not be a surprise if some Telstra investors are feeling some schadenfreude right now.
Even so, it has still been a tough few months for Telstra shares. Back in June, the ASX 200 telco was enjoying a multi-year high of $4.46 a share. However, sentiment has dramatically cooled off since then. Today, Telstra shares are asking just $3.96 each, down more than 10% from those June heights.
Most commentators, including the expert we'll shortly discuss, agree on the reason why Telstra shares have come under pressure recently. It relates to the full-year earnings report back in August – specifically the decision by Telstra to maintain its ownership of its InfraCo Fixed infrastructure assets. Some investors had been hoping that the company would unlock value by further separating these assets or even selling them off.
This probably explains why investors have taken their foot off the gas when it comes to Telstra shares.
However, one ASX expert reckons this share price weakness might be a good buying opportunity for investors looking for a bargain.
ASX broker names Telstra share price as a buy
According to reporting in The Australian recently, ASX broker Jefferies has retained a buy rating on Telstra shares. That's despite the broker cutting its 12-month share price target to $4.60 from $4.78. That would still represent a potential upside of over 16% from today's pricing if accurate though.
Jefferies argues that Telstra's investment thesis remains compelling, despite inflationary pressures putting strains on the telco's T25 cost-cutting plans.
Jefferies acknowledges that Telstra has "underperformed" thanks to investor disappointment over Telstra's "refrain from divesting physical infrastructure unit InfraCo Fixed".
However, the broker posits that "there is limited downside to TLS share performance as industry-wide average revenue per user should start improving in near term".
No doubt this opinion will bring some comfort to Telstra investors today. But let's see what happens over the coming 12 months.
At the present Telstra share price, this ASX 200 telco has a trailing dividend yield of 4.3%, which comes with full franking credits attached.
