I think it is fair to say that the Telstra Corporation Ltd (ASX: TLS) share price has been one of most disappointing performers on the market this year.
At the time of writing the telco giant's shares are down approximately 31% since the turn of the year.
Will they rebound higher?
At just 10x trailing earnings, Telstra's shares are remarkably cheap in my opinion. Even when taking into account the prospect of a decline in earnings in FY 2018.
Furthermore, the company intends to pay a fully franked dividend of 22 cents per share over the next 12 months.
This works out to be a generous 6.2% yield, which is significantly higher than the market average of 4.1%.
I believe that this makes Telstra an attractive investment option and suspect that its share price could start to rebound over the coming months now that the negative news flow is out of the way.
I'm not the only one that thinks this. Both Morgans and Credit Suisse have the equivalent of buy ratings on Telstra's shares. The two brokers have price targets of $4.15 and $4.00, respectively, on its shares.
This implies potential upside of between 13.5% and 18% for its shares over the next 12 months, excluding the aforementioned dividend.
I think this is a compelling risk/reward, especially given that one of the most bearish brokers, Credit Suisse, has a price target of just $3.35.
That's less than 5% lower than the current share price, implying limited downside potential for its shares in my opinion.
Overall, I think that Telstra is worth considering as an investment again and I would favour it ahead of telco rivals TPG Telecom Ltd (ASX: TPM) and Vocus Group Ltd (ASX: VOC).
