Is the Telstra share price a defensive buy during times of market uncertainty?

What do analysts like about Telstra?

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Key points

  • The Telstra share price is in the green today 
  • The telco's share price has slid nearly 6% year to date 
  • Analysts have named the telco as a "defensive growth" share in rocky times 

The Telstra Corporation Ltd (ASX: TLS) share price may have fallen year to date, but could it be a buy in turbulent times?

Telstra shares have dropped 5.69% since market open on 4 January and are currently trading at $3.98. In today’s trade, the telco’s share price is up 0.25%.

Let’s take a look at the outlook for the Telstra share price.

Is the Telstra share price a buy?

Analysts at Wilsons have named Telstra as a “defensive growth” share to buy in turbulent times. In a memo to clients, the company said defensive shares are starting to outperform the market. Commenting on the outlook, Wilsons said:

With the market concern on global economic growth due to China’s COVID lockdowns, the Russia/Ukraine conflict and a period of aggressive hiking from the US Fed, we think it is sensible to have an above-average allocation to defensives.

Our picks are healthcare, insurance and telco.

The company named Telstra specifically, along with CSL Limited (ASX: CSL), Insurance Australia Group Ltd (ASX: IAG) and Healthco Healthcare and Wellness REIT (ASX: HCW).

Meanwhile, a Morgan Stanley analyst has also recently named Telstra as one of two shares in Australia it recommends in risky times. Head of wealth management research Alexandre Ventelon highlighted the company’s completion of the NBN rollout, cost cutting, and return to positive mobile average revenue per user (ARPU) and EBITDA (earnings before interest, tax, depreciation, and amortisation), saying:

Morgan Stanley’s base case assumption is for an ARPU increase of 2% per annum for the next three years to A$52/pm in FY24E, although it may not reach its previous high watermark until the end of FY31.

Telstra share price snapshot

The Telstra share price has surged nearly 15% in the past 52 weeks, while it is down 0.75% in the past month.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has climbed nearly 1% the past year.

Telstra commands a market capitalisation of around $46.4 billion based on the current share price.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in 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 Scott Phillips.

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