Telstra [ASX:TLS] hasn’t had the best luck on the ASX this year, but this morning it saw a pleasant 2% increase.
This continues an upward trend that began yesterday, on the back of a positive broker note from Ord Minnett.
Yesterday the share price was up 3.5% to $2.86. At time of writing, the share price is sitting at $2.96.
Broker Upgrades Telstra’s Shares from Hold Rating to Accumulate
The note indicates an upgrade in rating, with a price target of $3.30.
The takeaway from this estimation is that there’s the potential for an upside of over 15% exists, excluding dividends, within the next 12 months.
Ord Minnett has speculated that, during Telstra’s investor day next Wednesday, management could announce further cost savings of up to $1 billion and product bundling initiatives.
This news could herald a new era of opportunity for the fallen telecommunications giant — a welcome turn of events for disillusioned Telstra loyalists.
The broker has also suggested the possibility of a structural separation in Telstra. This alludes to the idea of management severing the company’s infrastructure business from its retail one, and effectively creating a new listed company.
What this means for investors is hard to deduce at this stage, but any bold change is promising for a company that’s been floundering.
Is it Wise to Invest Just Yet?
The broker’s words are optimistic, and Telstra is looking more attractive than it has in recent days. But in regards to speculation, nothing has been confirmed.
They say patience is a virtue, and this could be prime time to exercise it. The benefit in awaiting the investor day event, is being able to see exactly what Telstra has planned for the future and how it can restore value on the market.
Editor, Money Morning
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