Down 12% from their highs: Are Telstra shares a post-results bargain buy?

Is now the time to pounce on this telco giant's shares? Let's find out.

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Telstra Group Ltd (ASX: TLS) shares were under pressure on Thursday following the release of its half-year results.

Investors were disappointed to see management trim its earnings guidance range for FY 2024 in response to weakness from one side of the business.

Telstra's shares ended the day over 2% lower at $3.90.

Is this a buying opportunity for investors? Let's see what analysts at Goldman Sachs are saying about the telco giant.

Are Telstra shares good value?

Goldman has been running the rule over Telstra's result and believes it was better than the market reaction would imply.

The broker highlights that "NAS challenges overshadow a solid core [result] and drive -2% to -3% EBITDA downgrades, but we believe issues are cyclical."

The broker picked out a few positives from the result that investors might want to focus on. It said:

Key positives: (1) Mobile EBITDA beat on better costs (and a very small one-off hardware margin benefit). Sub growth was also ahead of GSe, with strong 2Q trading that has continued into 3Q – implying a full CPI mobile price rise is likely this year; (2) NBN re-sale margins improved to 10% (vs. 4%/7% in 1H22/1H23), with some further potential benefit into 2H24 – but we expect the focus to shift to revenue growth; and (3) InfraCo Fixed earnings beat and will accelerate further into 2H24 on improved efficiency and ex-NBN strength.

All in all, Goldman has seen enough to remain positive and has reiterated its buy rating with a trimmed price target of $4.55 (from $4.65).

Based on the current Telstra share price of $3.90, this implies potential upside of almost 17%.

Importantly, Goldman's dividend forecasts remain unchanged. It continues to expect dividends per share of 18 cents in FY 2024, 19 cents in FY 2025, and 20 cents in FY 2026. This would mean dividend yields of 4.6%, 4.9%, and 5.1%, respectively.

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 positions in and has recommended Goldman Sachs Group. 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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