If I invest $2,000 in Telstra shares now, what could my return be in 2023?

Are Telstra shares a good investment idea in 2023? Hang up the phone and let's find out…

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Key points

  • Telstra shares are a popular for investors
  • Let's see if they would be a good option for a $2,000 investment this year
  • One leading broker thinks they are

Telstra Group Ltd (ASX: TLS) shares are a popular option for investors on the Australian share market.

Countless portfolios and superannuation funds across the country have some exposure to the telco giant.

But are Telstra shares a good option? What could a $2,000 investment turn into in 2023?

Telstra shares in 2023

The good news is that that majority of brokers out there are tipping the Telstra share price to rise from current levels.

For example, a recent note out of Goldman Sachs reveals that its analysts have just upgraded the company's shares to a buy rating with a $4.60 price target.

Based on the current Telstra share price of $4.10, this suggests potential upside of 12% for investors over the next 12 months.

This means that if you invested $2,000 into its shares, you would see your investment grow to be worth $2,240 by the end of the year if they reached Goldman's price target. The broker commented:

Given the defensive nature of telecoms into an uncertain 2023, we believe the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned by its mobile business, is attractive. We believe FY23 earnings will be robust, benefiting from challenges that the competitors are currently facing (Optus hacking, TPG MOCN) offsetting the near-term cost pressures (call centre on shoring, retail stores & staff inflation), and we are incrementally more positive on the medium term mobile outlook, supported by the recent TPG price rises.

The broker also sees potential from asset divestments following its restructure. It adds:

2023 presents a meaningful opportunity for Telstra to crystallise value through commencing the process to monetize its InfraCo Fixed assets – which we estimate could be worth between A$22-30bn.

Don't forget the dividends

The above return was based only on the Telstra share price performance.

However, as income investors will attest, Telstra shares provide investors with a healthy dividend yield right now.

Goldman Sachs is expecting the company to pay a 17 cents per share fully franked dividend in FY 2023. This equates to a 4.1% yield at current levels.

If we add this into the equation, your total return would come to 16.1%, bringing the value of your investment to $2,322.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 Group. 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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