MENU

Why the Telstra Corporation Ltd (ASX:TLS) share price is pushing higher

The market may have dropped lower again today, but that hasn’t stopped the Telstra Corporation Ltd (ASX: TLS) share price from pushing higher.

At one stage the telco giant’s shares were up 2.3% to $3.10. They have since fallen back a touch, but still sit over 1% higher in late morning trade.

Why are Telstra’s shares pushing higher?

Today’s push higher could be down to the latest quarterly NBN subscriber data that was released by the ACCC yesterday and a related broker note out of Goldman Sachs.

During the last quarter Telstra captured 52.7% of net adds, up 97 basis points on the second half of FY 2018. This was driven by market share gains in both metro and regional Australia.

As a comparison, rival TPG Telecom Ltd (ASX: TPM) captured 20% of net adds during the quarter, whereas Vocus Group Ltd (ASX: VOC) captured 7% of them.

This was a quarter on quarter improvement for TPG Telecom, but a reasonably sharp decline for Vocus.

According to Goldman Sachs, the latter was likely to be caused by the Dodo rebrand that occurred during August.

What now?

The broker expects more of the same from Telstra in the coming quarters and believes its forecast of 40,000 net broadband subscriber additions during the first half of FY 2019 is more than achievable.

In light of this, Goldman continues to rate Telstra’s shares as a buy and has a $3.60 price target on its shares. This price target implies potential upside of 17% excluding dividends over the next 12 months.

The broker has also held firm with its neutral rating on Vocus and its sell rating on TPG Telecom.

Should you buy Telstra’s shares?

I think Telstra is an attractive option for investors at these levels. However, I intend to wait and see what its dividend plans are for FY 2019 before considering an investment.

In the meantime, I think this dividend share is a less risky option for income investors.

OUR #1 dividend pick to grow your wealth now is revealed for FREE here!

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended TPG Telecom Limited and Vocus Communications Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

5 ASX Stocks for Building Wealth After 50

I just read that Warren Buffett, the world’s best investor, made over 99% of his massive fortune after his 50th birthday.

It just goes to show you… it’s never too late to start securing your financial future.

And Motley Fool Chief Investment Advisor Scott Phillips just released a brand-new report that reveals five of our favourite ASX stocks for building wealth after 50.

– Each company boasts strong growth prospects over the next 3 to 5 years…

– Most importantly each pays a generous dividend, fully franked.

Simply click here to find out how you can claim your FREE copy of “5 ASX Stocks for Building Wealth After 50.”

See the stocks now