The Telstra Corporation Ltd (ASX: TLS) share price has taken a bit of a tumble recently.
Over the last couple of weeks, the telco giant's shares have dropped over 6% to $3.89.
This leaves the Telstra share price trading closer to its 52-week low than its 52-week high.
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Is the Telstra share price in the buy zone?
While this weakness is disappointing for shareholders, it could be a buying opportunity for others.
According to a recent note out of Morgans, its analysts have an add rating and $4.60 price target on the company's shares.
Based on the latest Telstra share price, this implies potential upside of 18% for investors over the next 12 months.
And with Morgans expecting a 17 cents per share fully franked dividend in FY 2023, this potential return is boosted by a forecast 4.4% dividend yield.
Why is Morgans bullish?
Morgans was pleased with Telstra's performance in FY 2022 and its outlook commentary. It believes the tide has now turned for the company and it is onwards and upwards from here. The broker commented:
After years of scrambling hard to lower costs and offset declining earnings, TLS has comfortably turned the corner and guided to growth in underlying EBITDA again in FY23. Guidance is in line with consensus, 3% ahead or our forecast.
Morgans also highlights that the company has some of the strongest tailwinds behind it and a new CEO (former CFO Vicki Brady) that isn't likely to change the company's course. It explained:
Telco has the strongest tailwinds in a decade with an increasingly rational market, pricing rises and the criticality of telco increasingly recognised. This combines with an incoming CEO who currently seems unlikely to drastically change the business and the potential for value uplift (potential bids) following the legal restructure.
All in all, the broker feels this makes Telstra's shares great value at the current level.
