Deutsche Telekom posted a broadly solid first quarter that justified a slight upward revision to its full-year targets, yet the market response was tepid and analysts remain divided on where the stock goes from here. The disconnect between operational momentum and investor sentiment has left the shares trading well below their 50- and 200-day moving averages, a sign that the market is waiting for more conclusive evidence of a sustained turnaround.
Analyst Opinions Diverge Despite Similar Data
Goldman Sachs cut its price target for the German telecoms giant from €42 to €40, though it maintained a “Buy” rating and kept the shares on its “Conviction List.” Analyst Andrew Lee cited adjusted estimates following the quarterly release. By contrast, Deutsche Bank Research held firm with a €42 target, a level that implies a gain of more than 50% from the current price of €28.09. Analyst Robert Grindle called the first quarter “reassuring” and singled out the free cash flow outside the US business as a bright spot.
The stock itself sent a mixed signal. On Thursday, it edged down 0.53%, while over twelve months it has lost 11.53%. The market’s muted reaction to the guidance upgrade suggests investors are not yet convinced the company has cleared all near-term hurdles.
Q1 Numbers Beat Consensus, But Profit Lines Tell Two Stories
Revenue in the first quarter reached €29.9 billion, with organic growth of 4.7% partly offset by currency headwinds to leave reported growth at just 0.4%. Adjusted EBITDA AL came in at €11.5 billion, slightly above the consensus estimate of €11.35 billion. Service revenue rose organically to €25.0 billion.
On the bottom line, the picture is more nuanced. The adjusted group net profit climbed 6.5% to €2.6 billion, a stable contribution to the investment case. However, reported net profit fell to €2.04 billion from €2.845 billion a year earlier, owing to the absence of positive valuation effects from equity holdings. The core business remains on track, while headline earnings took a non-operational hit.
Free cash flow AL increased 0.7% to €5.7 billion in the quarter, underpinning management’s confidence to lift the full-year outlook.
Should investors sell immediately? Or is it worth buying Deutsche Telekom?
Guidance Lift Signals Management Confidence
Deutsche Telekom now expects adjusted EBITDA AL of around €47.5 billion for the full year, up from a previous target of around €47.4 billion. Free cash flow AL is forecast to exceed €19.8 billion, also a modest increase. The adjusted earnings per share guidance of approximately €2.20 was left unchanged.
The upward revision is small in absolute terms, but its signal effect is significant: management sees enough momentum to raise the bar despite exchange-rate drag and an uncertain macro environment. CEO Tim Höttges described the business as stable and pointed to the group’s resilience.
US Engine Drives Growth While Germany Shows Steady Progress
T-Mobile US remains the primary growth driver, adding 217,000 new postpaid accounts in the quarter. Höttges dampened expectations of a swift full takeover of the US subsidiary, focusing instead on operational growth and new partnerships.
In Germany, domestic revenue increased 1.9% to €6.3 billion. The fibre rollout has passed more than 13 million households, and the number of active fibre customers grew to 2.2 million. The key challenge here is converting coverage into paying customers, a process that is gaining traction.
What Comes Next
The stock closed at €28.24 on Wednesday, down 7.02% from its 50-day moving average and 3.53% below its 200-day average. On a weekly basis, it had gained 2.10%, but the twelve-month performance of minus 11.06% underlines the market’s caution.
Investors now have two key dates to watch. The ongoing wage negotiations with the Verdi union remain a near-term overhang, and the next quarterly results are due on August 6, 2026. Those numbers will show whether the modest guidance lift was merely conservative or whether the Telekom has more room to raise its sights as the year unfolds.
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