The gap between Deutsche Telekom’s operational strength and its stock price has rarely been wider. Fitch recently lifted the company’s credit rating to A- from BBB+, citing a commanding position in the German market and robust cash flow from T-Mobile US. The first quarter of 2026 delivered adjusted EBITDA AL of €11.5 billion, up 7.5% year-on-year, prompting management to raise full-year guidance to around €47.5 billion for that metric, with free cash flow AL expected to exceed €19.8 billion. Yet the shares ended last Friday at €26.31, just over 2% above their 52-week low — a stark reminder that strong fundamentals alone do not guarantee a rising stock.
A key support mechanism is about to vanish. The second tranche of the company’s share buyback programme expires on 30 June, ending a period during which Deutsche Telekom systematically repurchased roughly 17 million of its own shares since April. The total volume of this tranche ran up to €550 million, with 1.65 million shares bought in the final week alone. While the overall 2026 programme authorises up to €2 billion, the timing of the next tranche remains undisclosed, leaving the stock without a predictable buyer. The absence of that regular demand could leave the equity more exposed to broader market currents.
Those currents are not favourable at present. Higher bond yields and rising interest rate expectations are weighing on capital-intensive sectors, and telecommunications is among the most exposed. The stock sits nearly 9% below its 200-day moving average of €28.89 and more than 23% off the February high of €34.35. The relative strength index has fallen to 34 — technically in oversold territory — which occasionally sparks a bounce, but as analysts caution, oversold is not a buy signal without a clear catalyst. The forward price-to-earnings ratio for 2026 stands at 13.1 and at 11.7 for 2027, well below the 10-year average of 17.8, reflecting the market’s scepticism.
Should investors sell immediately? Or is it worth buying Deutsche Telekom?
Beyond the macro headwinds, uncertainty surrounding T-Mobile US continues to overhang the stock. Reports in the Wall Street Journal about a potential full merger with the American subsidiary have not been confirmed by Bonn, but the speculation alone has been enough to keep many institutional investors on the sidelines. Until clarity emerges, the strong operating performance at home and the Fitch upgrade seem to provide little insulation.
Longer-term commitments, however, remain intact. Deutsche Telekom is investing €30 billion in fibre optics through 2030, with an additional €800 million earmarked for the next three years. The target for 2026 is to connect 2.5 million new households, and the company now emphasises actual customer take-up over mere availability. In 5G, its area coverage of 89.1% gives it a lead of roughly 13 percentage points over Vodafone and Telefónica. Fitch expects the company’s leverage to remain near 2.0 times EBITDA — a comfortable level for the new rating.
The immediate calendar offers few potential triggers. On 30 June, Deutsche Telekom will shut down its MMS service alongside O2 and 1&1 as the industry transitions to the RCS standard — a largely symbolic move financially. One day later, the nationwide network measurement week organised by the Bundesnetzagentur under #CheckDeinNetz concludes, though results will not be published until autumn. The next hard stop is 6 August, when second-quarter numbers are due. Until then, the performance of T-Mobile US and any further merger rumours are likely to set the tone, leaving the stock in a waiting pattern that its robust operational story has so far failed to break.
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