What's in store for the Telstra share price in FY24?

Telstra has had a great time in FY2023. But what will FY2024 bring?

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Key points

  • Telstra shares have had an incredible time over the past year or two, generating outsized returns for investors
  • The Telstra share price has smashed the ASX 200 over FY2023 to date, with the returns extended by Telstra's hefty dividends
  • Not one, but two ASX brokers reckon the telco remains a buy today as well

Although we are still a few days away from the official end of the 2023 financial year, we can probably conclude (hopefully not prematurely) that the Telstra Group Ltd (ASX: TLS) share price has had a very good financial year.

This ASX 200 telco share was going for $3.85 back at the beginning of July 2022. But today, Telstra is asking $4.31 for a share on the ASX today (at the time of writing). That represents a gain of just over 12% for FY2023 to date.

And that doesn't include Telstra's hefty dividend payments either, which would probably add another 4% or so in returns over the period as well.

In a sense, it's a pity that FY2023 didn't end last week. Early last week, we saw Telstra clock a new 52-week hike of $4.46 a share, a level the telco hasn't treaded since March 2017. You can see all of this charted below:

 

The Telstra share price has had a pleasing time of it in recent years, no matter which way we spin it. Year to date in 2023, this ASX 200 blue chip has gained just over 9%, faring well against the S&P/ASX 200 Index (ASX: XJO)'s return of around 2.5%.

And since Telstra got down to under $2.70 a share back in late 2020, this company is up a staggering 60% or so.

But that's all water under the proverbial bridge now. So what's next for the Telstra share price? Will FY2024 be just as kind to investors as FY2023 was?

Are Telstra shares an FY2024 buy today?

Well, luckily for Telstra investors, the ASX broker consensus is that Telstra shares are indeed still worth buying. Let's first check out how ASX broker Morgans rates the telco.

As we covered earlier this month, Morgans remains bullish on the Telstra share price, despite the run the company has been on of late. The broker gave Telstra an add rating, as well as a 12-month share price target of $4.70.

Morgans pointed to the telco's growing earnings as a justification for this rating, as well as a projection of future dividend hikes. Here's some of what the broker had to say on Telstra:

After a major turnaround, TLS has emerged in good shape with strong earnings momentum and a strong balance sheet. In late CY22 shareholders vote[d] 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.

But Morgans isn't the only broker that rates Telstra as a buy right now. Just last week, we also reported that fellow ASX broker Goldman Sachs had given the telco a buy rating, with its own 12-month share price target of $4.70.

So it seems that at least these two ASX brokers are unanimous in their belief that the Telstra share price remains a buy for FY2024 and beyond at its current levels.

We'll of course have to wait and see if these brokers are on the money. But no doubt these opinions will delight Tesltra's ASX 200 investors today.

Motley Fool contributor Sebastian Bowen has positions in Telstra Group. 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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