The Telstra Corporation Ltd (ASX: TLS) share price may be trading lower on Monday but that hasn't stopped in from smashing the ASX 200 over the last six months.
During this time, the telco giant's shares have gained a sizeable 23.5%.
As a comparison, the ASX 200 is up 9.3% over the same period.
Why is the Telstra share price up 23% in six months?
Investors have been driving the Telstra share price higher over the last six months largely due to optimism that a long-awaited return to growth was on the horizon.
The good news is that this optimism was not unfounded. Earlier this month, Telstra released its full year results and revealed its expectation of a solid rise in operating earnings in FY 2022.
In FY 2021, Telstra recorded underlying EBITDA of $6.7 billion. This was within the company's guidance range of $6.6 billion to $6.9 billion.
The company is now guiding to underlying EBITDA of $7 billion to $7.3 billion in FY 2022. This represents year on year growth of 4.5% to 9%.
But it doesn't stop there. Also giving the Telstra share price a lift was the reiteration of its underlying EBITDA aspiration of $7.5 billion to $8.5 billion in FY 2023.
This growth is expected to be driven by mobile services revenue growth, its productivity program, and the easing of the NBN headwind. The latter peaked in FY 2020, reduced in FY 2021, and will be substantially less in FY 2022.
$1.5 billion share buyback
Another catalyst for the strong Telstra share price gain was the announcement of a $1.35 billion on-market share buyback. This follows the sale of a stake in some of its infrastructure assets.
Telstra's CEO, Andrew Penn, commented: "When we launched T22, we committed to establishing a standalone infrastructure business unit for three reasons: to give transparency of those assets, to bring a harder commercial edge to how we operationalise them, and to create optionality with a view to maximising shareholder value."
"This share buy-back is a clear demonstration of how we are creating additional long-term value for our shareholders," he added.
Where next for its shares?
The good news is that the team at Ord Minnett still see value in the Telstra share price.
A recent note reveals that its analysts have a buy rating and $4.40 price target on its shares.
Based on the latest Telstra share price of $3.97, this implies potential upside of 11% before dividends and almost 15% including them.
