Connect with us


Telstra Group Ltd Share Price Hits Multi-Year Low After Earnings Guidance Update



Times News Global Featured Image

The Telstra Group Ltd (TLS) share price took a hit on Tuesday, closing at a multi-year low of $3.57 after the company issued an update on its earnings guidance. Goldman Sachs, a prominent financial institution, analyzed the update and provided insights into the telco giant’s future prospects.

As per the earnings guidance, Telstra reaffirmed its forecast for FY 2024, expecting underlying EBITDA in the range of $8.2 billion to $8.3 billion. Looking ahead to FY 2025, the company anticipates a growth in underlying EBITDA to $8.4 billion to $8.7 billion, driven by a $350 million cost reduction plan.

Goldman Sachs highlighted both positives and negatives from the update. A key negative was Telstra’s decision to remove the CPI linked-pricing mechanism, influencing industry dynamics in mobile services. The absence of this mechanism could impact future mobile pricing decisions and customer expectations.

On the positive side, Telstra’s cost reduction initiatives, including significant reductions in NAS products and headcount, exceeded expectations. This bodes well for the company’s earnings outlook for FY 2025 and beyond, offsetting the impact of deferred price rises.

Despite the adjustments in valuation and dividend forecasts, Goldman Sachs maintained a buy recommendation for Telstra shares, setting a target price of $4.25, indicating a potential upside of 19% over the next 12 months.

Rachel Adams

Times News Global is a dynamic online news portal dedicated to providing comprehensive and up-to-date news coverage across various domains including politics, business, entertainment, sports, security, features, opinions, environment, education, technology and global. affairs. Our commitment lies in sharing news that is based on factual accuracy, credibility, verifiability, authority and depth of research. We pride ourselves on being a distinctive media organization, guided by the principles enshrined in Article 19 of the Universal Declaration of Human Rights. Made up of a team of ordinary people driven by an unwavering dedication to uncovering the truth, we publish news without bias or intimidation.