The Telstra Corporation Ltd (ASX: TLS) share price was a relatively decent performer in September.
Although the telco giant's shares fell 3% during the month, this was notably better than the ASX 200 index and its 7% decline.
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What lies ahead for the Telstra share price in October?
It looks set to be a very eventful month for the Telstra share price in October.
That's because next week Australia's largest telco will be inviting shareholders to vote on the proposed corporate restructure at a scheme meeting on the same day as its annual general meeting.
It is also worth noting that a trading update is likely to be provided to investors the same day. The market will no doubt be keen to see if Telstra is still performing in line with its FY 2023 guidance.
What is the corporate restructure?
Telstra's corporate restructure is a key component of its T25 strategy.
The company notes that it is an important next step in Telstra's drive to increase focus on its customer and infrastructure businesses, increase transparency of the assets in these businesses, and create greater flexibility and optionality to realise value from its fixed infrastructure assets over time.
If shareholders approve the restructure, it will see the establishment of Telstra Group Limited as the head entity of the Telstra group.
After which, the aim is to eventually have InfraCo Fixed (physical network infrastructure assets), InfraCo Towers (physical mobile tower assets), ServeCo (customer service and products), and Telstra international below it.
From there, Telstra has a number of options. This includes selling some of its assets or demerging them into separate ASX listings. The latter is being seen as the likely option for the InfraCo Fixed business.
Are Telstra's shares a buy this month?
The team at Morgans is positive on the Telstra share price ahead of the scheme meeting.
In fact, the broker believes that this meeting could be the key to unlocking value for shareholders. It commented:
After a major turnaround, TLS has emerged in good shape with strong earnings momentum and a strong balance sheet. In late CY22 shareholders vote on Telstra's legal restructure, which opens the door for value to be released. TLS currently trades on ~7x EV/EBITDA. However some of TLS's high quality long life assets like InfraCo are worth substantially more, in our view. We don't think this is in the price so see it as value generating for TLS shareholders. This, free option, combined with likely reputational damage to its closest peer, following a major cybersecurity incident, means TLS looks well placed for the year ahead.
Morgans has an add rating and $4.60 price target on the company's shares.
