The Telstra Corporation Ltd (ASX: TLS) share price is tracking well this year, having gained 24.5% so far. After starting 2021 trading for $3.01, the Telstra share price is now $3.75.
For context, the S&P/ASX 200 Index (ASX: XJO) has gained 9.8% in 2021 to date.
There’s been a number of big news stories out of Telstra this year that appear to have helped the telecommunications giant’s share price climb.
Let’s take a look at what’s been driving the market’s excitement for Telstra this year.
The Telstra share price in 2021
Half year results
Telstra released its half year results on 11 February.
Within them, the company reported a 10.4% drop in revenue. It also declared its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) had fallen 14.2% to $3.3 billion.
However, Telstra shares gained 2.52% on the back of its results, likely due to its refusal to cut its final dividend from the fully franked 8 cents it had handed out in the previous period.
On March 22, Telstra announced its proposed legal restructure will be completed by December.
As part of its restructure, Telstra will be establishing a new holding company and creating separate subsidiaries.
One subsidiary, InfraCO Fixed will own and operate Telstra’s ducts, fibre, data centres, and exchanges. Another, InfraCo Towers, will own and operate Telstra’s mobile tower assets. While ServeCo will hold Telstra’s radio access network and spectrum assets.
A fourth subsidiary will be named Telstra International and will take ownership and responsibility of – you guessed it – Telstra’s international business.
Following the release of the company’s plan to restructure its assets, the Telstra share price gained 1.25%.
Sale of InfraCo Towers
Finally, on 30 June, Telstra reported it had sold a 49% stake in InfraCo Towers for $2.8 billion after costs.
The share in InfraCo Towers was purchased by a consortium comprising Future Fund, Commonwealth Superannuation Corporation, and Sunsuper. The sale is expected to be completed in the current financial year.
Telstra plans to return around half of the sale’s proceeds to its shareholders. It also flagged the possibility of a share buy-back.
The news saw Telstra’s shares gain a whopping 4.44% over the course of the day.
Brokers forcasting a bright outlook
Several top brokers have this month weighed in on a bright outlook for Telstra shares.
On the back of the InfraCo sale news, Credit Suisse retained its outperform rating on the telco. The broker has a price target of $4.15 citing its belief that the higher than expected sale price will be accretive to earnings.
Goldman Sachs rates Telstra as a buy with a 12-month price target of $4.20 a share. According to the broker, a move by competitor Vodafone to remove all promotional discounts on its SIM-only plan bodes well for Telstra’s margin.
Telstra share price snapshot
This week, the Telstra share price finally recovered to trade at its pre-COVID-19 level.
It reached its highest closing price since February 2020 on 2 July, when Telstra’s shares finished the day at $3.79.
Right now, the Telstra share price is 6% higher than it was this time last year.