Marc O. Schmidt column: Deutsche Telekom before a strategically important step | News

In times of stock market turmoil, such as the one we are currently experiencing, investors often focus more on defensive stocks. Typically, this includes stocks from the telecommunications industry.

This can now be seen, for example, in the price development of Deutsche Telekom (WKN: 555750 / ISIN: DE0005557508). While most of the shares have been under strong selling pressure in recent months, Telekom shares have occasionally gained around 30 percent from the provisional low of € 14.68 in March this year.

Deutsche Telekom Chart: Stuttgart Stock Exchange

Technically promising chart

In the meantime, until July, it had surpassed 19 points. This represented a 20-year high and therefore a strong technical buy signal. Among other things, the news of the planned billion-dollar sale of the radio tower division has recently raised the share price.

Exciting development in the planned sale of the radio tower

According to Bloomberg last week, insiders say a consortium led by KKR & Co. becomes the favorite for the purchase of shares in Deutsche Telekom radio towers. A New York-based private equity firm, along with Global Infrastructure Partners and Stonepeak, made an offer that Deutsche Telekom believes is cheaper than competitors from Brookfield Asset Management and Spanish Cellnex Telecom, sources Bloomberg said.

It is quite possible that soon the DAX group will be able to choose a buyer for shares in the division valued at about USD 20 billion. Negotiations are well advanced, but according to Bloomberg, nothing has been decided yet.

One of the largest European infrastructure offers

According to Bloomberg, the sale of shares in the telecommunications masts industry may be one of the largest European infrastructure deals this year. Capital-intensive business is very tempting for institutional investors because masts generate predictable, long-term income. Equipment ownership was once an important part of the business model for European telecommunications groups. However, in recent years, pressures to increase liquidity and reduce the cost of new investments have increased, leading to the trend of outsourcing or getting rid of cell towers.

A strategically sensible step

The sale of radio towers should be a strategically sensible step for Deutsche Telekom. In this way, liquidity is created for development investments and hidden values ​​are revealed. In any case, the company has been on the road to success for years, and the driving force behind T-Mobile US (WKN: A1T7LU / ISIN: US8725901040) is decisive.

Analysts expect Deutsche Telekom’s revenues to increase five percent year-on-year to EUR 113.6 billion in 2022. For 2023, Erls’ consensus forecast is € 116.2 billion. These are not impressive increases but show that the Group is making operational progress.

Analysts agree

Analysts currently agree on the further development of T-Action. All over the world, there are only buy recommendations. For example, JPMorgan is also one of the optimists. The US bank continues to recommend Overweight and is sticking to the previous target price of EUR 28.50.

According to JPMorgan analyst Akhil Dattani, the possible sale price of the radio tower of $ 20 billion should slightly exceed market expectations, but will only lead to a limited reduction in Deutsche Telekom’s debt. According to Dattani, the most important factor influencing the share price in the context of the events is the share buyback, aimed at the subsidiary T-Mobile US with a value of up to $ 60 billion in 2023-2025.

If you want to avoid the individual risk of stocks in Deutsche Telekom and count on a positive development of the prices of the entire basket of American and European stocks, you can see the following index certificate (WKN: DA0AAT / ISIN: DE000DA0AAT4) on the Titan 20 index. This index includes 20 companies, which have developed particularly strongly on the stock exchange in recent years and which are also positively assessed by analysts. In addition to Deutsche Telekom, these include Microsoft, Apple, Visa and the world leader in the insulin market Novo Nordisk.

Image source: Deutsche Telekom press photo

The post of Deutsche Telekom made its first appearance on the EINBLICKE markt before a strategically important step.

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