Australian earnings preview Telstra

Full-year earnings preview:

Telstra (TLS) is Australia's largest telecommunications provider offering fixed-line internet services, mobile phones, mobile networks as well as pay television (Foxtel) in a joint venture with News Corporation. It reports its full-year numbers on the 13^th of August.

Telstra is one of the few defensive stocks to have benefitted from the impact of the Coronavirus. Social distancing and lockdown measures have driven a huge increase in internet and data usage due to a sharp acceleration towards digitization in activities like telehealth, online learning, remote working, and e-commerce.

Rationalisation within the Australian telecommunications landscape is resulting in less aggressive price competition. Along with cost-cutting within Telstra and no foreseeable end to rolling lockdowns and travel restrictions, the medium-term outlook for Telstra is as appealing as it has been for many years.

In the current environment of low-interest rates and vastly reduced dividends, Telstra offers investors an attractive fully franked 4.7% dividend yield. Consensus statutory EPS estimate is around 46 cents per share, with total income expected to be in the range of $25.3 to $27.3 billion and underlying EBITDA in the range of $7.4 to $7.9 billion.

Technically, Telstra is trading within an upward sloping trend channel following the March $2.87 low and the rally displays corrective characteristics. Solid resistance is viewed $3.55/$3.60 area with a break/close above here needed to signal a rally towards $4.00 is underway. On the downside, buyers would be expected to support prices on dips towards the $3.30/$3.20 area.

Source Tradingview. The figures stated areas of the 31^st of July 2020. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation