The Telstra Corporation Ltd (ASX: TLS) share price is defying the market weakness and is pushing higher.
In afternoon trade, the telco giant's shares are up 1.5% to $3.96.
Why is the Telstra share price rebounding?
Investors have been bidding the Telstra share price higher today after brokers responded largely positively to its half year results.
For example, according to a note out of Morgan Stanley, its analysts have retained their overweight rating and lifted their price target on the company's shares to $4.60.
Morgan Stanley was pleased to see Telstra finally deliver organic earnings growth after five years of declines. Overall, this has given the broker confidence in the sustainability of the telco's dividends.
What else is being said?
Over at Goldman Sachs, its analysts have retained their neutral rating with a $4.30 price target. Its analysts were pleased with the performance of Telstra's key mobile business but note that weakness in the fixed business persists.
Goldman said: "The key driver of the EBITDA beat was the +25% growth in Mobile EBITDA, +8% vs. GSe. Although impacted by accounting changes, service revenue trends were very strong. To drive continued growth, we believe TLS needs: (1) a recovery in int. roaming; or (2) mobile price rises."
"Continued competitive pressures and NBN regional roll-out drove a disappointing Fixed Ent. performance- with the decline in ARPU likely to continue, impacted by intense competition and technological evolution," it added.
Overall, Goldman is positive on Telstra and expects dividend increases to start from FY 2024. However, due to the current valuation of the Telstra share price, it is sticking with its neutral rating.
Morgans remains bullish
Elsewhere, the team at Morgans remain bullish on the Telstra share price. The broker has retained its add rating and $4.56 price target.
Morgans commented: "TLS's 1H22 result showed the second consecutive half of underlying growth, with underlying EBITDA up 5%, underlying EPS up substantially and the DPS flat yoy. Reported numbers dipped yoy due to lower NBN revenue and other one-off gains (which boosted 1H21 reported numbers). Mobile was the star performer. Performance is tracking in the right direction and FY22 guidance was re-iterated. We make minor EPS upgrades on lower D&A; retain Add and $4.56 TP."
