There's no way around it, argue Citi analysts: even within a difficult operational environment, Telstra shares are cheap. Citi sees a bottom valuation at $2.85 and upside as far ahead as $3.70 (the new price target, 10c below the previous one).
Say the analysts: at the current share price (circa $3.11) the market is pricing the stock as if management has limited ability to arrest the fixed line decay and as if there will be 100% no sweetener from the Federal Government to execute its NBN plans successfully. Citi analysts disagree on both counts.
In the meantime, the analysts have further lowered their EPS estimates and report they have now positioned themselves 3-4% below market consensus. This is, they explain, a conservative stance. But all of the above remains valid.
TLS Price at posting:
$3.13 Sentiment: None Disclosure: Held
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