The share price of telecommunications giant Telstra Corporation Ltd (ASX: TLS) has arguably held up well when considered alongside other leading large-cap stocks such as Woolworths Limited (ASX: WOW), BHP Billiton Limited (ASX: BHP) and Woodside Petroleum Limited (ASX: WPL).
Despite the relative outperformance compared with these fellow Top 20 stocks, Telstra's relative performance compared with the index has still seen Telstra underperform with a fall of around 14% over the past year, compared with a fall of about 7.5% in the index.
The share price – currently at $5.36 – is well below the $6 to $6.50 trading range which the stock traded between for much of the past 12 months.
Based on analyst consensus forecast data provided by Morningstar, Telstra is currently trading on a financial year (FY) 2016 price-to-earnings (PE) ratio of 15.3x and a fully franked dividend yield of 5.9%.
These metrics compare favourably against the S&P/ASX 300 (Index: ^AXKO) (ASX: XKO) forecast averages of 18.7x and 5.1% respectively.
So what are the chances that shareholders could see their stock's share price rise back above $6?
At $6 per share, Telstra would trade on a FY 2016 PE and yield of 17.1x and 5.25% respectively.
Meanwhile, at $6.50, Telstra would trade on a prospective PE and yield of 18.5x and 4.8% respectively.
Essentially, assuming Telstra deserves to trade in line with market averages – a scenario which would indeed seem justified given the group's prospects, quality and size – there would appear to be reasonable scope for the share price to trade once again in the $6 region.
