Deutsche Telekom (ETR:DTEGn) Shares Rise

Deutsche Telekom's shares rose following the company’s plans to accelerate revenue and earnings growth, backed by a strategy that includes a share buyback program of up to €2 billion in 2025.

At 6:44 am (1044 GMT), Deutsche Telekom was trading 1.3% higher at €27.085.

The buyback is designed to complement its existing shareholder return policy, which involves distributing 40 to 60% of adjusted earnings per share through dividends.

This is expected to enhance shareholder value by reducing the number of outstanding shares, potentially increasing earnings per share.

The buyback plan fits into Deutsche Telekom's broader strategy of generating over €15 billion by 2027, providing flexibility for future acquisitions, including a potential increase in its stake in T-Mobile US (NASDAQ:TMUS).

The company is focusing on key growth areas such as artificial intelligence and data-driven operations to fuel consistent gains in both revenue and profits.

Analysts at Citi noted that Deutsche Telekom's service revenue and EBITDA AL targets for 2023-2027 are in line with or slightly above market expectations, although Free Cash Flow After Leases, excluding T-Mobile US, is projected to be slightly lower than consensus due to higher interest, pension contributions, and leasing costs.

Citi maintains a target price of €28.3 for Deutsche Telekom, based on a sum-of-the-parts model using 2024 estimates. While the brokerage flagged potential risks from competition, regulation, and technological changes, it emphasized Deutsche Telekom's strong investment strategy and solid commitment to shareholder returns.

The company aims to reach €21 billion in free cash flow by 2027, supported by growth across its European and U.S. operations.

> “We have achieved or even exceeded nearly all of our targets and are now worth more than all our peers on our domestic continent combined,” said Deutsche Telekom’s chief executive, Tim Höttges.