Telstra share price climbs on AGM update: Here's what you need to know

Telstra is holding its annual general meeting today. Here's what it said.

| More on:
Two male ASX investors and executives wearing dark coloured suits sit at a table holding their mobile phones discussing the highest trading ASX 200 shares today

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Telstra Group Ltd (ASX: TLS) share price is pushing higher on Tuesday morning.

At the time of writing, the telco giant's shares are up 1% to $3.93.

Why is the Telstra share price rising?

Investors have been bidding the company's shares higher today after responding positively to its annual general meeting update.

At the meeting, as well as providing a review of the last 12 months, management offered a brief update on its expectations for the FY 2024.

According to the release, Telstra's CEO, Vicki Brady, has reaffirmed the company's guidance for the year ahead.

She is expecting underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) in line with its T25 ambition for a mid-single digit growth rate.

Brady also reaffirmed the company's capex guidance of $3.6 billion to $3.7 billion. This includes around $300 million of strategic investment outside of business-as-usual investments. This relates to the intercity fibre and Viasat infrastructure projects.

And given how Telstra is a big favourite of income investors, they will be pleased to learn that Brady expects the company "to continue to achieve strong cash flow, enabling us to invest for growth and deliver returns to shareholders."

Inflationary pressures

Telstra acknowledged that inflationary pressures on costs is making its cost reductions harder than it would have liked. However, Brady believes the company can still achieve the majority of its goals. She adds:

While our cost out ambition is being challenged by high inflation, we still expect to achieve the large majority of this by FY25. We remain absolutely committed to delivering our underlying EBITDA and EPS growth ambitions.

Brady also defended the company's decision to hold onto its InfraCo Fixed assets instead of divesting them. The CEO believes they will play a key role in supporting the Telstra dividend in the near term. She explains:

We also made the decision to maintain the current ownership structure of InfraCo Fixed, at least for the medium term, as we believe this will create the greatest value for shareholders.

Our focus remains on delivering long-term, sustainable growth, and the objectives and principles of our capital management framework, including seeking to grow our dividend. InfraCo Fixed plays an important role in enabling this, particularly in an inflationary environment.

The Telstra share price is now up approximately 3.5% over the last 12 months.

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.

More on Communication Shares

A man looking at his laptop and thinking.
Communication Shares

$24 million paid out: Telstra under fire

The industry watchdog hammers major telco for basic failures in its billing systems, which slugged thousands of customers for no…

Read more »

A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.
Communication Shares

Guess which ASX All Ords share is jumping 11% on Friday

This growing telco is ending the week strongly.

Read more »

A man sits in contemplation on his sofa looking at his phone as though he has just heard some serious or interesting news.
Communication Shares

New 52-week low: Can Telstra shares bounce back in 2024?

Telstra has had an awful 2023. Will 2024 be any different?

Read more »

Two male ASX investors and executives wearing dark coloured suits sit at a table holding their mobile phones discussing the highest trading ASX 200 shares today
Communication Shares

TPG shares rise amid $128 million 5G spectrum auction win

TPG has just strengthened its position in the telco market.

Read more »

wheelchair user in an office talking on mobile phone
Communication Shares

Telstra share price falls despite $546m investment news

Telstra is boosting its 5G network with a major investment

Read more »

man looks at phone while disappointed
Communication Shares

Are Telstra shares in the buy zone? Here's what Bell Potter thinks

Is it time to buy this telco giant's shares? Let's find out.

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Communication Shares

Can Telstra shares reach $4 by Christmas?

Can we call on this stock to deliver good returns?

Read more »

Man in business suit carries box of personal effects
Communication Shares

Telstra shares fall on the ASX amid news of the Optus CEO resigning

The Optus CEO has called it quits.

Read more »