Deutsche Telekom Shares Climb

Deutsche Telekom's (ETR:DTEGn) shares surged following their third-quarter results, fueled by strong financial metrics, notably EBITDA after leases (EBITDAaL), which surpassed market expectations by 2%.

At 6:24 am (1124 GMT), Deutsche Telekom's stock was up by 4%, trading at €28.950.

This growth was primarily driven by a robust performance in Germany, where EBITDAaL grew by 3.5%, a notable increase from 1% in the previous quarter. This offset a slight underperformance in the mobile sector, which experienced a slowdown in service revenue.

Moreover, Deutsche Telekom's revised guidance significantly impacted investor sentiment. The company raised its 2024 Group EBITDAaL target to approximately €43 billion from a prior estimate of €42.9 billion, buoyed by positive outlooks in both the U.S. and European markets.

Analysts at UBS expressed optimism about Deutsche Telekom's long-term fundamentals, suggesting that the stock offers defensive growth with an EPS of over 11% per annum and shareholder returns exceeding 4% annually (including a 3.0% dividend yield and a 1.4% buyback).

Morgan Stanley analysts highlighted that a 12% increase in T-Mobile US's (NASDAQ:TMUS) value over the past month positively impacted Deutsche Telekom's overall valuation.

Organic service revenue growth remained robust at 3.8%, continuing the steady trajectory seen earlier this year. The results show that Deutsche Telekom is adeptly navigating challenges in mobile services while seizing opportunities in broadband and fixed-line services.

Morgan Stanley anticipates potential consensus upgrades, which could enhance the stock’s attractiveness further.