The telco is trading ~5% below recent highs but saw a boost this week thanks to an upgrade from UBS. The brokers looked at consumer trends in the telco space, arguing that consumers are more accepting of price rises in broadband and mobile services than first thought. After many years of strong competition between telcos driving prices lower, the market has returned to a more rational state and Telstra, alongside competitors, have been lifting prices once again. Given the whole space has been lifting prices in tandem, churn intentions have actually fallen and Telstra has seen a slight gain in market share. UBS argues that Telstra is priced in line with recent averages despite 15%+ EPS growth expected over the next few years with dividends expected to grow by double digits as well.
MM is long and bullish TLS
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