Australia's Telstra rises as Morningstar hikes fair value

Shares of Australia's top telco Telstra TLS.AX rise 1.12% to A$4.945/shr

Morningstar lifts TLS's fair value estimate, 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 ~23.3% YTD