Deutsche Telekom's target price has been raised by UBS from €28 to €31, with a "Neutral" rating on the stock.
The increase in target price is due to the competitive concerns highlighted by the latest quarterly results from mobile operators in Germany, particularly in the budget segment. The telecommunications market in Germany has become more competitive, with multiple players vying for market share. The challenges faced by operators include aggressive pricing strategies and the presence of low-cost service providers.
Despite these concerns, UBS remains optimistic about the long-term prospects of Deutsche Telekom. The company is expected to deliver defensive earnings growth, with an anticipated EPS growth of over 11% and annual shareholder returns exceeding 4%. Deutsche Telekom is well-positioned to sustain growth by leveraging its established market presence and operational efficiencies. Analysts believe that the company's strategic initiatives and investments in infrastructure will enable it to maintain a competitive edge.
The financial community shares this sentiment, as established players in the telecommunications sector are expected to focus on enhancing customer experience and expanding service offerings to retain and attract subscribers. Despite the challenging competitive landscape, UBS's revised target price and positive long-term growth projections indicate that Deutsche Telekom is well-equipped to navigate these challenges. Investors may find value in the company's defensive growth profile and potential for steady returns.