Shares of telco giant Telstra Corporation Ltd (ASX: TLS) finished the month of May 4% down at $3.88 apiece.
The telecommunications and broadband provider lagged the S&P/ASX 200 Index (ASX: XJO)'s 3% loss as well, falling from a high of $3.99 early in the month.
Meanwhile, in broader market moves, the S&P/ASX 200 Communication Services Index (ASX: XTJ) finished more than 6% down in May and is 13% down this year to date.
What's up with the Telstra share price?
Whilst it was a fairly quiet affair out of Telstra's camp last month, it appears market sentiment has begun to shift for the company.
With prices trading down in May, investors sold off Telstra shares at pace with the stock making a continuous series of lower highs and lower lows in that time.
The moves were matched by those of the communication services index (XTJ) which fumbled from a high of 1,512 points to start the month and made no signs of recovery.
In addition, analysts at Macquarie released a note highlighting that smaller telco providers are stealing market share from larger providers like Telstra.
Macquarie analysts said that collectively the largest 3 providers lost around 0.3% of market share last quarter, citing data from the Australian consumer watchdog. However, it does have a suspended rating on Telstra.
Separately, Jefferies analyst Roger Samuel also believes that Telstra might raise its mobile prices this year to keep up with the pace of inflation.
He rates Telstra a buy with a $4.47 per share price target in line with several other brokers who price Telstra shares on a similar valuation.
Meanwhile, around 57% of brokers covering Telstra still reckon it's a buy right now, whereas around 36% say it's currently a hold, according to Bloomberg data. Just one firm – Barclay Pearce – says it's a sell on a $3.52 per share price target.
The consensus price target from this list is $4.52 per share, suggesting around a 16.5% potential upside should this view be correct.
The Telstra share price has clipped an 11.5% gain in the last 12 months of trade despite struggling to find range this year to date, shown below.
