The Telstra Corporation Ltd (ASX: TLS) share price dropped into the red on Thursday. This followed the release of the company's full year results for FY 2022.
The telco giant's shares ended the day down by 1.25% to $3.96.
What did analysts say about the result?
Telstra delivered a result that was largely in line with the market's expectations and its final dividend increase to 8.5 cents per share was a big (pleasant) surprise.
In light of this, the weakness in the Telstra share price appears to have been driven by its guidance for FY 2023.
Telstra has guided to EBITDA growth of 7.5% to 10% in FY 2023, which wasn't quite as strong as analysts at Goldman Sachs were expecting.
The broker has commented:
Telstra reported FY22 EBITDA/EPS that were +1%/+9% vs. GSe, but in-line excl. $116mn of legacy network disposals. Lower Digicel & NBN one-off earnings expectations resulted in FY23 EBITDA guidance -1% vs. GSe prior. T25 targets were mostly re-iterated, except for returning D&IP to growth in FY24E (with the inter-capital fibre build being more IRU/cash focused). However, the key surprise was the 8.5¢ final dividend (GSe 8.0¢).
Is the Telstra share price good value?
While Goldman sees value in the Telstra share price, it doesn't see enough to recommend it as a buy just yet.
According to the note, the broker has retained its neutral rating and $4.40 price target on the company's shares. Based on the current Telstra share price, this implies potential upside of 11% for investors.
But that's not including dividends. Goldman is forecasting a 17 cents per share fully franked dividend in FY 2023, which would mean a 4.3% yield. This would stretch the total return on offer with its shares to over 15%. Not bad for neutral!
