Should I invest $5,000 in Telstra shares in July?

Telstra shares have slumped recently. Will they keep falling, or is an upside ahead?

| More on:

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

Telstra Group Ltd (ASX: TLS) shares have started the first month of the new financial year around 2% lower at $5.99 a piece, at the time of writing. 

The telco stock also ended June around 1.55% lower, after softening from a multi-year high in mid-May.

For the year to date, Telstra shares are now around 2% higher, and they're also around 3% higher than this time last year. 

For context, the S&P/ASX 200 Index (ASX: XJO) is up around 0.6% for the year to date and around 3% higher over the past 12 months, at the time of writing. 

Now the question is, are Telstra shares still a buy in July? Or has the telco stock already passed its peak?

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, and holding a mobile phone in his other hand.

Image source: Getty Images

Here's what the experts think

Market Index data shows the majority of brokers have a buy rating on Telstra shares. The $5.32 target price implies around a 7% upside at the time of writing.

Analysts are more bearish on TradingView. All 10 analysts have a hold rating on the shares. The average $5.22 target price implies a potential 5% upside at the time of writing. Although some forecast Telstra shares to climb around another 12% to $5.57 over the next 12 months. 

Macquarie thinks Telstra shares are trading close to fair value. The broker downgraded its rating to a hold earlier this month and shaved its price target on Telstra shares to $5.57. Based on the current share price of $5.14, the price target suggests potential upside of around 8%. 

The team at Shaw and Partners give Telstra a sell rating. The broker said it thinks the stock has been trading at elevated levels and was pushed higher by its defensive appeal. But it adds that underlying growth is limited, and the dividend yield is becoming less attractive. 

Bell Potter recently reiterated its hold rating on Telstra shares and set a $5.10 target price. The broker said it expects little, if any, surprises at the company's upcoming results, so the focus shifts to FY27 outlook and guidance. It forecasts mid to high-single-digit growth in the key metrics of underlying EBITDA, cash EBIT, and EPS.

Up or down: What could influence Telstra's shares this month?

The two key themes to keep an eye on in July are Telstra's mobile and broadband price changes, and any commentary ahead of the company's FY26 results announcement next month.

The telco implemented price changes on some of its plans from today. If customers largely accept the higher prices without switching providers, investors may gain confidence that Telstra can continue growing earnings. But if the opposite happens, then investors might start to question the company's competitive position.

And of course, any information about upcoming earnings, especially commentary on cash flow or dividends, would also influence investor sentiment.  

Motley Fool contributor Samantha Menzies 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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Macquarie 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 female executive smiles as she carries out business on her mobile phone.
Earnings Results

TPG Telecom shares on watch as earnings and dividend edge higher in HY26

The telco reported a 1% increase in EBITDA to $821 million.

Read more »

A man talking on his mobile phone looks uncertain.
52-Week Lows

Telstra shares hit fresh 52-week low: What's next for the ASX 200 telco stock?

Telstra shares fell further into the red on Thursday.

Read more »

A man wearing a colourful shirt holds an old fashioned phone to his ear with a look of curiosity on his face as though he is pondering the answer to a question.
Communication Shares

Buying Telstra shares? Here's the yield you'll get today

Telstra's dividend yield just went up.

Read more »

A girl sits on her bed in her room while using laptop and listening to headphones.
Earnings Results

Superloop FY26 earnings: EBITDA up 33% as customer growth surges

Underlying EBITDA is up 33.1% to $122.7 million, exceeding upgraded guidance.

Read more »

woman on phone
Communication Shares

How much could the Telstra share price rise in the next year?

Telstra shares have dropped. Can they rebound over the next year?

Read more »

Happy investor holding up 3 fingers amidst an orange background.
Communication Shares

3 reasons why the Telstra share price is a buy

I think Telstra could be a strong buy for a number of benefits.

Read more »

Australian notes and coins symbolising dividends.
Communication Shares

Everything you need to know about the Telstra dividend

Owners of Telstra shares can look forward to another good dividend.

Read more »

A young woman in a red polka-dot dress holds an old-fashioned green telephone set in one hand and raises the phone to her ear.
Earnings Results

Telstra share price drops 5% on FY26 report despite big dividend increase

Telstra will pay a final dividend of 10.5 cents per share for FY26.

Read more »