Deutsche Telekom shares are firmer again after a weak previous day. Analysts remain mostly positive, while market rumors add additional uncertainty.
• Stock recovers after previous setback
• Analysts remain mostly bullish
• Merger speculation creates uncertainty
After a turbulent trading day in the middle of the week, Deutsche Telekom shares were on the rise again on Thursday. Investors on the Frankfurt trading floor are using the reduced price level for selective purchases after reports of large-scale strategic plans the day before had created a noticeable selling mood.
In XETRA trading on Thursday, the shares of the Bonn telecommunications giant ultimately recorded an increase of 0.40 percent and were quoted at 27.53 euros. This means that some of the recent losses can be offset, although the market environment for the DAX stock remains characterized by a certain basic skepticism.
Speculation about the US subsidiary caused selling pressure
The burden on the previous trading day resulted primarily from media reports that the group was considering a full merger with its extremely successful subsidiary T-Mobile US. This scenario was met with skepticism in market circles on Wednesday, as such an integration could entail not only financial challenges but also a potential dilution of state shares through a new holding structure abroad. The uncertainty about the future structure of the group and the associated strategic risks had temporarily pushed the share price down by more than four percent.
Analysts see opportunities despite technical gloom
Despite the current recovery, the technical chart picture for the T share remains tense after slipping below important average lines. However, market observers point out that the fundamental strength of the US subsidiary continues to be the group’s most important pillar.
Despite this, analysts gave a series of positive ratings for the share the day before: The British investment bank Barclays left the rating for Deutsche Telekom at “Overweight” with a price target of 39.50 euros. The US analysis house Bernstein Research also confirmed Deutsche Telekom shares at “Outperform” with a price target of 37 euros following the report about a possible merger with the subsidiary T-Mobile US. Deutsche Bank confirmed its buy rating with a price target of 42 euros, and the US bank JPMorgan also remains at “overweight” and its price target of 40 euros.
Whether the current recovery movement is sustainable will become clear in the coming trading days, when market participants weigh the possible effects of a full merger with T-Mobile US against the current valuation in more detail. For the moment, however, investors’ confidence seems to be high enough to see the price level reached on Wednesday as an opportunity to enter.
Claudia Stephan, Julia Walter, editorial team finanzen.net
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