German Telekom share: The forecast is optimistic

Last Updated: 23. Februar 2024By

Deutsche Telekom stock has slightly declined after the presentation of its financial results for the past year 2023 and is currently trading at around 22 euros, roughly at the level of early January (as of February 23, 2024, 10 a.m.). Not all numbers were convincing – in particular, interest-related write-downs have negatively impacted the results in the fourth quarter.

However, overall, Deutsche Telekom was able to meet its goals in 2023 and is also looking optimistically at the current fiscal year. The company is forecasting a growth in earnings and cash flow for 2024. In the medium and long term, Deutsche Telekom stock continues to offer potential. This is also the view of analysts.

Deutsche Telekom with fresh numbers for 2023 and 2024 With 112 billion euros in revenue, Deutsche Telekom slightly exceeded the previous year’s sales, with an organic revenue growth of 0.6 percent. Adjusted EBITDA AL („AL“ stands for „after leasing“, meaning it is adjusted for leasing liabilities) amounted to 40.5 billion euros, an increase of 4 percent compared to 2022.

In terms of profit, Deutsche Telekom performed significantly better with 17.8 billion euros than the previous year with around 8 billion euros. However, the significant increase is mainly due to the one-time effect of the majority sale of the radio tower business in Germany and Austria. In addition, analysts had expected slightly higher profits and in Q4, the company ended up with a loss of over 1 billion euros due to valuation effects after rising interest rates.

However, in terms of the forecast for the current fiscal year 2024, the DAX company was able to convince: Deutsche Telekom expects an EBITDA AL of 42.9 billion euros (an increase of 6 percent) and an AL cash flow in the range of 18.9 billion euros (an increase of 16 percent compared to 2023).

Deutsche Telekom stock: Growth provides tailwind The telecommunication company has seen worse times: Both in Europe and with its US subsidiary T-Mobile US, the company is expected to continue growing in 2024. This could also help the stock, which initially fell after the fresh numbers were released – but in the long term, it continues to offer potential for investors.

The majority of analysts‘ price targets are significantly above the current level. Barclays, for example, sees Deutsche Telekom stock at 29 euros and Deutsche Bank at 30 euros. And just today, JPMorgan confirmed its target price of 31 euros for the stock. That would be a potential increase of over 40 percent for Deutsche Telekom stock.