TLS – Morgans rates the stock as Upgrade to Add

Telstra surprised Morgans with the early divestment of a 49% stake in its InfraCo towers business. Bids were due by December 2021 but the deal will be consummated in 1H22. It’s considered a good deal for shareholders as Telstra keeps control and a high price was attained.

It also shows management are serious about taking steps to continue releasing value, points out the broker. The rating is upgraded to Add from Hold and the target price rises to $4.19 from $3.33.

The company will use roughly 50% of the proceeds to pay down debt. The balance (around 11cps) will be returned to shareholders.The analyst has consistently said shares are worth circa $4.50 per share if the sum of the parts is able to be realised.

Sector: Telecommunication Services.


Target price is $4.19.Current Price is $3.76. Difference: $0.43 – (brackets indicate current price is over target). If TLS meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).



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