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Telstra share price: what to expect from half-year results

Though Telstra has struggled with growth in recent years, analysts are expecting the blue-chip telco to report higher revenue and earnings (EBITDA) in FY20.

Telstra share price in focus Source: BLoomberg

When will Telstra report its results?

Telstra Corporation (ASX: TLS) – Australia’s largest telecommunications company – is set to report its FY20 half-year results on 13 February.

When will the telco pay its next dividend?

The telco’s interim ex-dividend date is currently set for 26 February; with a payment date set for 27 March.

Telstra currently has a dividend yield of 2.62% – according to the ASX.

Telstra share price action at a glance

The telco has been a surprise performer in the last year, rising over 20% in that period. Prior to the market open on Thursday, the Telstra share price stood at $3.80.

Ultimately, the stock has traded in a relatively consistent manner in that period: dipping to $3.40 per share in October, but otherwise being a steady gainer in the last 12-months.

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What analysts are saying

Though the company has experienced good share price momentum over the last 12-months, analysts continue to favour the telco’s prospects.

Heading into the company’s half-yearly results release: 10 analysts rate the stock a buy, three rate it a hold and three rate it a sell.

The current average analyst price target on Telstra is $3.93 per share. Likely not to evoke much a reaction among investors, if analysts are proven correct on that price target, investors would be looking at upside potential of ~3.4%.

Morgans Financial is the most bullish broker on Telstra right now; rating the stock an add, against a 12-month price target of $4.46.

Fundamentals in focus

Though Telstra is liked by analysts, the company is facing a number of headwinds. Macquarie Wealth Management for example, recently noted that:

‘Corporate revenue declines may accelerate due to increased competition; [and] Fixed will see margin compression from high levels of NBN migrations.’

Even so, the investment bank posits that mobile trends are improving, and at the current stage, it looks as if 'Telstra is gravitating toward the upper end of its FY20 guidance.'

Ultimately, though Telstra has struggled in recent years, seeing both revenue and earnings decline, analysts, on average, expect the company to return to growth in FY20.

For example, though the company posted revenues of $25,848 billion (FY18) and $25,259 billion (FY19); analysts are currently expecting FY20 revenue to come in 7.2% stronger (on average) to $27,071 billion, according to Bloomberg Data.

Earnings (EBITDA) are also expected to come in stronger in FY20 – expected to hit $8,902 billion – on average, according to Bloomberg Data. In 2016, for reference, the blue-chip telco reported EBITDA of $10,551 billion.

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