Telstra Corporation Analysis

I’m busy looking after the sick and the young and so am tossing this half finished Telstra analysis out there to help clear my plate and of course to get feedback.

Here is the PDF of my Telstra analysis.

To the right is one of the main points from my analysis and why I created the poll for Telstra’s lowest probable share price this year. The returns are not annualised.

In the next seven months Telstra will cough up 28cents dividend, that’s 40cents pre-tax. Over such a short time frame a valuation makes little sense as the voting machine will determine the price. However what this chart shows is that at the current price of $2.80 Telstra presents an excellent short term opportunity with an attractive risk/return profile.

Disclosure: Long Telstra

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One comment

  • Hi Dean, hope you had a good Christmas and NY!

    With TLS, I remember doing a DCF with terminal growth rate 0% and -2%pa growth over the next 5 years. The base valuation was 2.2. That was before NBN deal, but that isn’t a certaintly anyway.

    The dividend looks unsustainable. I expect it may rally a bit when that is cut. Unfortuantely I’ve been burnt a few times by this one, at $5 and more recently $3. I’d like to see good technicals before buying in again as bottom picking on this has not been very rewarding to date. In fact I would have made an excellent return by doing the opposite of what I’ve done to date!

    Fortunately I’m out of it now and with that off my mind, my thoughts are, the ingredients of a real turnaround are not there yet and I based on my past record I would not be comfortable holding it.

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