Why has the Telstra (ASX:TLS) share price had such a lacklustre start to December?

No Merry Christmas for Telstra?

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The Telstra Corporation Ltd (ASX: TLS) share price has not had a great start to this last month of 2021. Since the start of December, Telstra shares have fallen from $4.06 each to the current share price of $4.02 today (flat so far from Friday’s close).

To be fair, the S&P/ASX 200 Index (ASX: XJO) hasn’t had a great time of it over December thus far either. The ASX 200 has fallen around 0.9% over the same period. But, Telstra is still lagging the broader market. So what’s going on with this ASX 200 telco lately?

Well, unfortunately for those of you who like definitive answers, there’s not one to give. There has been no major official news out of Telstra for weeks.

Telstra share price has a Santa sag

But Telstra has been the beneficiary of more positive developments lately than negative ones too. The company’s ongoing share buyback program continues to take Telstra shares off the market (benefitting existing shareholders). Just today, Telstra released a disclosure informing investors that it purchased 6.86 million of its own shares last Friday for retirement.

Further, my Fool colleague James covered a recent and optimistic broker recommendation for Telstra. Goldman Sachs now rate Telstra shares with a 12-month share price target of $4.40 – implying a potential future upside of almost 9.5% on today’s pricing.

Goldman also sees Telstra shares paying out an annual dividend of 19 cents per share by FY2025, up from FY2021’s 16 cents per share in total dividends.

So it’s unclear what has dented investors’ confidence in Telstra shares over December thus far. Perhaps the telco has just been caught up in the market gyrations we have seen in recent weeks. Or perhaps, since the Telstra share price is still up 33.55% year to date in 2021 so far, investors are giving it a breather.

Whatever the reason for the most recent malaise, Telstra shares are still pretty close to their 52-week high of $4.09 a share even at today’s pricing.

At the current Telstra share price, the ASX 200 telco has a market capitalisation of $47.54 billion, with a price-to-earnings (P/E) ratio of 25.74 and a dividend yield of 3.99%. 

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Motley Fool contributor Sebastian Bowen owns shares of Telstra Corporation Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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