Telstra (ASX:TLS) share price hits yet another 52-week high. What’s going on?

Christmas has come early for the telco’s shareholders. We take a closer look

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The Telstra Corporation Ltd (ASX: TLS) share price has done it again. Telstra shares are currently trading at $4.14 each, up 0.36% for the day so far this Christmas Eve.

That’s not all though, folks. Telstra hit a new high of $4.15 a share in intra-day trading shortly after lunchtime. Not only is that a new 52-week high for this ASX 200 telco, but it’s also the highest share price Telstra has traded at since mid-2017.

That puts Telstra’s year-to-date gains so far at a very pleasing 37%. Including Telstra’s dividends and full franking credits, and we’re looking at a return north of 40% for the year (touch wood). Not bad for an old blue-chip like Telstra, one could say. Especially since this is just the latest in a string of new 52-week highs we have seen Telstra clock up over 2021.

It’s hard to picture at the current pricing, but it was only back in October last year that Telstra was hitting a new all-time low of $2.63 share. Since those dog days, the company is up more than 55%.

So what could be behind today’s most recent push into record territory?

Why is the Telstra share price hitting a new 52-week high today?

Well, it’s not entirely clear. There are no pre-Christmas items of news out of the company today. But there are several factors that could be at play. The first is Telstra’s ongoing share buyback program.

Telstra is currently in the process of buying back its own shares. Just this morning, it told investors that it bought and retired just over a million shares yesterday. Share buybacks decrease the number of shares in circulation. Under the laws of supply and demand, less supply usually translates into higher pricing, so this is why these buybacks could be relevant.

We could also be seeing the effects of some ASX broker opinions on Telstra play out. For example, as we covered earlier his week, Goldman Sachs is currently very bullish on this telco. Goldman currently rates Telstra as a buy with a 12-month share price target of $4.40. Goldman particularly likes Telstra’s T22 and T25 cost-cutting strategies, which it believes will help fund a dividend increase by FY2024. Even today, Telstra’s dividends are offering a fully franked yield of 3.86%.

So perhaps it’s this combination that has resulted in the Telstra share price reaching this new 52-week high today. Whatever the reasons, it’s likely to have made more than one Telstra shareholder’s Christmas a merrier one.

At the current Telstra share price, this ASX 200 telco has a market capitalisation of $48.96 billion, with a price-to-earnings (P/E) ratio of 26.5.


Motley Fool contributor Sebastian Bowen owns 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 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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