Should You Consider Buying ASX:TLS at Present?

Telstra Group Ltd (ASX: TLS) has experienced a downturn in its stock performance in recent months, with shares on a trajectory from a 52-week high of $4.46 in June to the current trading price of $3.79, hovering close to the 52-week low of $3.75. Despite this disappointing trend, the question arises: does the decline create a buying opportunity for investors? Let's delve into what analysts are saying about this telco giant.

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Current Stock Evaluation

While market sentiment may not be overwhelmingly bullish on Telstra, leading brokers in Australia present a more optimistic outlook. A significant portion of the broker community holds a buy rating on Telstra's shares, accompanied by price targets that suggest potential double-digit returns.

Macquarie's Outlook

Last month, Macquarie provided an outperform rating for Telstra, setting a $4.40 price target. This implies a notable upside of 16% for investors. Macquarie's forecast includes fully franked dividends of 18 cents per share in FY 2024 and 19 cents per share in FY 2025. With these projections, investors could anticipate an approximate 5% yield over the next 12 months.


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Morgan Stanley's Bullish Stance

Morgan Stanley exhibits even more bullish sentiment, assigning an overweight rating and a $4.75 price target to Telstra stock. This indicates a substantial upside of 25% from the current levels. When factoring in forecast dividends, the total return potential reaches approximately 30% between the present and the corresponding period next year.

Investment Considerations

For investors contemplating new additions to their portfolios, Telstra might be worth considering based on the positive outlook from prominent analysts. The buy recommendations, coupled with potential double-digit returns and above-average dividend yields, position Telstra as an intriguing option for those seeking opportunities in the market.

Conclusion

In conclusion, despite Telstra's recent stock performance challenges, the outlook from key analysts suggests a more optimistic future. Investors looking for potential value and returns in their portfolios may find Telstra worth exploring, especially considering the favorable ratings and price targets provided by Macquarie and Morgan Stanley.
Location: Australia

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