Telstra shares managed an 11% return in FY23. What's next?

Can Telstra top its impressive FY2023 return in FY2024?

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Key points

  • FY2023 was a good financial year for the ASX 200 Index, returning around 9.7%
  • The Telstra share price one-upped the ASX 200, with the telco giving investors a return of just under 12% last financial year
  • ASX brokers reckon Telstra shares have plenty of growth left in the tank and will continue to go higher across FY2024

Now that we've embarked on a new financial year, it's a great opportunity to go back and see how some of the ASX 200's prominent blue chip shares fared over the 2023 financial year just gone. So today, let's check out Telstra Group Ltd (ASX: TLS) shares.

Overall, FY2023 was a pretty decent financial year for ASX shares. The S&P/ASX 200 Index (ASX: XJO) ended up rising from 6,568.1 points to the 7,203.3 points it closed at last Friday. That's a gain worth 9.67%.

So how did the Telstra share price do? Well, Telstra shares started July 2022 at $3.85 each. Last Friday, the telco closed at $4.30. That translates into a gain for FY2023 of 11.69%, a handy outperformance of the broader market. And that's not even taking into account Telstra's famous dividends.

As per usual, Telstra forked out two fully franked dividends over FY2023. Both were worth 8.5 cents per share, with investors receiving the final payment in September and the interim dividend in March.

For investors who bought Telstra for the $3.85 a share the company was going for last July, they would have enjoyed an FY2023 yield of 4.42%. That swells Telstra's FY2023 returns even higher, as does Telstra's full franking.

What's next for Telstra shares in FY24?

Now that Telstra has a fairly successful FY2023 under its belt, what might FY2024 hold for Telstra shares?

As it turns out, ASX brokers are fairly unanimous in their view of Telstra today. And luckily for shareholders, they are still bullish on the telco.

As we covered yesterday, Goldman Sachs reckons the Telstra share price has plenty of gas left in the tank. Goldman has rated Telstra as a buy, with a 12-month share price target of $4.70. That would see investors enjoy an upside of around 9.55% from today's pricing.

Here's some of what Goldman had to say on Telstra:

We believe the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned through its mobile business, is attractive.

We also believe that Telstra has a meaningful opportunity to crystalise value through commencing the process to monetize its InfraCo Fixed assets – which we estimate could be worth between A$22-33bn.

Fellow ASX broker Morgans is equally as bullish, sharing Goldman's price target of $4.70. This broker eyes off Telstra's "strong earnings momentum and strong balance sheet", and also estimates Telstra will be able to unlock significant value from its infrastructure assets.

So ASX brokers seem to reckon Tesltra will maintain its strong returns for investors for a while yet. No doubt shareholders will be delighted by what they had to say. But let's see what happens with Telstra shares over the coming financial year.

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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