Since the beginning of 2021, the Telstra Corporation Ltd (ASX: TLS) share price has risen from its past state of hibernation. Fuelled by the telco's first net profit increase in five years, investors are hopeful of a return to growth.
The renewed optimism in one of Australia's most recognisable blue chips has landed the company a 34.8% increase in value in 2021. This places the telecommunications giant as the fifth best-performing ASX-listed company in the S&P/ASX 20 Index (ASX: XJO).
While one good year is good, long-term shareholders would be wondering if this outperformance has the potential to continue. To determine what next year could look like for the Telstra share price, we review what analysts are expecting.
But first, let's look into the company's own roadmap for 2022.
What does Telstra have planned for the year ahead?
The plan for Telstra's future was laid out for all to see at its T25 investor day on 16 November. While the event focused on a longer-term strategy around the company achieving a compound annual growth rate in the high-teens for its earnings per share during FY 2021 and FY 2025, it also touched on next year's goals.
In short, Telstra plans to come good on six key priorities by the end of FY22, these include:
- Complete digitisation
- Group restructure
- 5G leadership
- Return Enterprise to growth
- Grow services business
- Deliver on cost reduction
These aims are on top of already drastic overhauls of the business since the introduction of the T22 plan. Since 2018, Telstra has been reshaped with a consolidation of its products from 1,800 to 20, removal of a third of its workforce, and $2.3 billion stripped from the company's costs.
In speaking with The AFR, Telstra CEO Andy Penn has described his plans for the company loud and clear.
Penn said:
I'd say three things – one is that it's absolutely front and centre about continuing to transform customer experience and just taking that to the next level. Secondly, it's about growth, both within the core but also some of our new business investments are really starting to help to get some traction.
Making a call on the Telstra share price in 2022
One fund manager that is bullish on Telstra for the upcoming year is Pengana Capital's Rhett Kessler. The experienced fundie recently labelled the telco a buy for the fund, naming Telstra one of its biggest holdings in the portfolio.
In describing his case for why Telstra is still appealing at its current share price, Kessler said:
We like the fact that the two main assets are the mobile phone network, and let's face it, mobile data is the new oxygen. I have four kids. Try and take it away from them. So that's a very good business, and they're obviously good engineers, because they've got the best network, and they're very good marketers because they managed to get a 15-20% premium for the same data that their competitors sell.
Dividend investors might also be gravitating towards the Telstra share price in 2022. According to analysts at Goldman Sachs, the company looks well-placed to grow its dividend in the coming years.
