Morningstar hikes Aussie Telstra's fair value, bets on “boring” resilience in tech era
Morningstar lifts Telstra’s TLS.AX fair value, citing a lower weighted avg cost of capital of 6.5% vs 6.8% to reflect the telco’s stronger earnings resilience
Ups fair value by 8% to A$5.40, saying that during a frenzy for tech-driven growth, the telco’s “boring” defensiveness still holds appeal given its connectivity role in a digital world
Says co's "Connected Future 30" plan aims to reshape the telco into a leaner operator focused on core strengths, though management bristles at any notion of “shrinking to greatness”
However, flags that TLS is shrinking share capital to lift EPS and sustain dividend, having share buybacks running
Nevertheless, adds that co's appeal rests on "dependable", steadily rising dividends underpinned by a strong balance sheet
Stock up ~22% YTD
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