And here's why Goldman Sachs is upbeat on Telstra: We believe...

And here's why Goldman Sachs is upbeat on Telstra:
We believe Telstra’s FY17 result (August 17) has the potential to positively surprise given we believe it will announce the outcome of the capital allocation review that it is currently undertaking. We see this as an opportunity for Telstra to crystalize a significant amount of value from its long-term (30+ years), inflation linked NBN payments. In our recent note, we estimated that if it were to securitize these at a discount rate of 4.55% and buy back stock, it could be c.20% EPS accretive across FY19-21E and support a 34¢ps dividend (vs. GSe 28¢ps).
The result will also provide an update on the performance of its productivity program. Although we see this A$1bn program as somewhat conservative relative to global precedents, its ability to deliver on this does face a significant degree of investor skepticism. Hence a strong performance on costs at this result should help Telstra to build credibility for its broader program.