The Telstra Group Ltd (ASX: TLS) share price was out of form in August.
During the month, the telco giant's shares lost 6% of their value.
This is four times greater than the 1.4% decline recorded by the ASX 200 index over the same period.
What happened to the Telstra share price last month?
Investors were hitting the sell button in August in response to the release of the company's FY 2023 results.
Although Telstra delivered the goods in FY 2023, there were some aspects of the result that disappointed the market.
As a reminder, for the 12 months ended 30 June, Telstra reported a 5.4% increase in total income to $23.2 billion and a 9.6% lift in underlying EBITDA to $8 billion.
The latter was at the top end of Telstra's underlying EBITDA guidance range of $7.8 billion to $8 billion and a touch ahead of the consensus estimate of $7.94 billion.
In light of this profit growth, the Telstra board declared a fully franked full-year dividend of 17 cents per share. This is a 3% year on year increase from 16.5 cents per share in FY 2022.
So why the selling?
Well, one thing that didn't go down well with investors was management's decision to maintain the current ownership structure of InfraCo fixed for at least the medium term.
Many analysts saw the potential divestment of its InfraCo assets as a way to unlock value and support a capital return. However, its decision to hold onto these assets means that this possibility is now off the cards.
It was for this reason that the team at Morgans downgraded Telstra's shares to a hold rating and cut the price target on them by over 10% to $4.20. The broker explained:
Telstra's FY23 result and FY24 guidance were all largely in-line with expectations. Shares traded lower on news that the company will be maintaining the current ownership structure of InfraCo fixed for at least the medium term. In our view this removes the short term appeal of TLS and we move to a Hold recommendation.