As earnings season kicks into gear, Telstra Group Ltd (ASX: TLS) will be one of the most closely watched names on the ASX.
Telstra shares are up 22% so far in 2025, and Macquarie remains positive on the company. It reaffirms its "Outperform" rating and a $5.19 share price target, suggesting ~ a 5% upside plus dividends (at the time of writing, the Telstra share price was $4.93).
So, what is Macquarie expecting this earnings season?
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FY25 expectations: modest but stable
Macquarie's FY25 forecasts for Telstra are relatively steady:
- Revenue: $23.7 billion (up 1%)
- Underlying EBITDA: $8.66 billion (up 5%)
- Underlying NPAT: $2.18 billion (up 2%)
- Dividend per share: 18.5 cents (up 3%)
The broker notes that mobile subscriber growth should be solid with 45,000 net adds in postpaid for 2H25.
The impact of recent mobile plan price hikes will be in focus as most telcos have recently raised their prices. Telstra has raised mobile prices, but will it result in higher revenue, or will some of that increase be countered by a loss of customers who vote with their feet and move to other providers?
Macquarie estimates that Telstra will be able to maintain its 41% mobile market share as branded customers stick with Telstra because it is familiar and trusted.
More importantly, Macquarie expects this will translate into 3.6% postpaid ARPU growth in 2H FY25, and that Telstra will maintain price leadership in a market in which competitors appear to be increasingly rational (by also raising their prices and not engaging in a lose-lose price war).
Foolish takeaway
Earnings growth may be modest this year, but Telstra appears to be executing its long-term strategy well. For income-focused investors or those seeking relative defensiveness in a high-volatility market, Telstra offers a mix of stable dividends, modest growth, and upside optionality if cost-outs and price rises flow through.
Macquarie isn't expecting fireworks, but it does think this telco could continue to quietly outperform.
