Is Telstra (TLS) still a buy?

Hi John,

On the MM website you can see that 11 of the brokers that follow Telstra do indeed have the stock as a BUY, with 2 of these actually having TLS as a STRONG BUY.

As you say if you follow our commentary through 2023/4 we’ve had the stock as a BUY for income, and we hold it in our Active Income Portfolio having purchased it back in 2021 around current levels, although we trimmed 2% from the holding in mid 2023 at $4.27.

Two points of note:

• We removed it from our Hitlist for MM’s Active Growth Portfolio on Wednesday after their earnings update – we don’t think they can grow earnings enough to fit that portfolio.
• However, while the update has seen analysts lower earnings expectations, we think the earnings remain defensive and ultimately robust, which provides us with confidence around the dividend which we view as very sustainable. for that reason, we retain an ‘Active’ tag on the stock for our Income Portfolio which means we are happy to buy at current levels, noting our weighting of 5%.