TLGPY changes

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View the full Nov 12, 2026 version

Price: $17.43
Discount category: Close to intrinsic value
Intrinsic value source: AI estimate
Next earnings: Feb 18, 2027
Next earnings is estimate: No
Company name: added: Telstra
Sector: added: Telecommunications and mobile services
About: added: Telstra Group Limited (Telstra) is an Australian telecommunications company. It sells mobile, fixed broadband and enterprise connectivity services, and its infrastructure business owns mobile towers, fiber and subsea cables. Telstra reports in Australian dollars for years that end on June 30. In FY26 (the year to June 30, 2026), total income was A$23,405 million, underlying EBITDAaL (EBITDA after leases) was A$8,341 million, and cash earnings were A$2,876 million, or 25.5 cents per share. Mobile users grew by over 270,000. Telstra is building the Aura Network, a long-distance fiber network, and has signed contracts with Microsoft, Google, AWS and Firmus. Vicki Brady is Chief Executive Officer. The pick is the American Depositary Receipt (ADR) that trades over the counter in the US under TLGPY, in US dollars. Each ADR represents five ordinary shares (the F-6 registration statement of the depositary, Deutsche Bank Trust Company Americas, October 20, 2022). Telstra's ADRs are sponsored Level I receipts and cannot list on a US exchange (Telstra investor page). Telstra is not an SEC filer, so this profile comes from its own annual report and ASX releases.
Thesis: added: The market prices Telstra close to the AI estimate, as a mature telecom with large spending needs, more debt and outage risk. Cash earnings per share rose 13.8% to 25.5 cents in FY26, helped by a smaller share count. But total income fell 0.9% to A$23,405 million. Strategic investment in the Aura Network and Viasat is now about A$1.8 billion from FY23 to FY28, up from A$1.6 billion. A major network outage on July 8, 2026 affected some Triple Zero calls, and Telstra cannot yet size the regulatory and customer costs. Telstra also shifts its funding toward debt: it finished an A$1.25 billion buy-back in June 2026 and announced another of up to A$1 billion. For the price to stay close to the AI estimate, Telstra must meet its FY27 guidance of underlying EBITDAaL of A$8.5 billion to A$8.8 billion and Cash EBIT of A$4.75 billion to A$4.95 billion. It must also grow cash earnings at a mid-single digit rate toward FY30 and turn Aura Network and digital infrastructure contracts into revenue. The regulator's response to the outage and the half-year result on February 18, 2027 are the next tests. If guidance holds, the price can stay close to the AI estimate as cash earnings grow.
Valuation: added: The intrinsic value for Telstra is an AI estimate from November 12, 2026. It is not an analyst's value. An AI research agent calculated it from Telstra's own reports. Telstra is not an SEC filer. It reports to the Australian Securities Exchange (ASX) and publishes its reports on its investor site. The pick is the American Depositary Receipt (ADR) that trades over the counter in the US under TLGPY, in US dollars. Each ADR represents five ordinary shares (the depositary's F-6 registration statement, October 20, 2022), so the value is per ADR. Telstra reports in Australian dollars. The estimate converts at 0.6841 US dollar per Australian dollar, the rate of the Reserve Bank of Australia for November 12, 2026, and keeps it for the coming year, which is an assumption. The method is a multiple of FY28 cash earnings per share, for the year to June 30, 2028. Cash earnings is Telstra's own measure: underlying EBITDAaL (EBITDA after leases) less business-as-usual capex, spectrum amortisation, finance costs, tax and minorities. It is after interest and tax, so the estimate makes no debt adjustment. The FY26 annual report (August 13, 2026) gives underlying EBITDAaL of A$8,341 million, Cash EBIT of A$4,659 million, net finance costs of A$669 million, tax of A$949 million, minorities of A$165 million, cash earnings of A$2,876 million and cash EPS of 25.5 cents. It gives 11,139,136,247 shares on issue at June 30, 2026 and net debt of A$17,301 million. The market release of August 13, 2026 gives FY27 guidance of underlying EBITDAaL of A$8.5 billion to A$8.8 billion and Cash EBIT of A$4.75 billion to A$4.95 billion, a new buy-back of up to A$1 billion, and an ambition of mid-single digit growth in cash earnings. The estimate takes FY27 Cash EBIT at A$4.85 billion, the midpoint, finance costs at A$700 million, tax at 23.8% of Cash EBIT less finance costs (the FY26 rate), minorities at A$175 million and 11.0 billion average shares. This gives cash earnings of about A$2,990 million and 27.2 cents per share. These FY27 figures, the FY28 figures and the multiples are assumptions. The low case assumes that earnings stall under outage costs and heavier network spending, with FY28 cash EPS of 26.5 cents, about 3% below FY27, at 15 times. It gives A$3.98 per share, A$19.88 per ADR, or US$13.60 per ADR. The base case assumes cash earnings growth near the company's mid-single digit ambition and fewer shares, with 28.5 cents, up about 5%, at 17.5 times. It gives A$4.99 per share, A$24.94 per ADR, or US$17.06 per ADR. The high case assumes stronger infrastructure revenue from the Aura Network, with 30.5 cents, up about 12%, at 20 times. It gives A$6.10 per share, A$30.50 per ADR, or US$20.87 per ADR. The estimate assumes weights of 25%, 50% and 25%. The weighted intrinsic value is US$17.15 per ADR. As of Nov 12, 2026.
Risks: added: Network outages and their cost. The July 8, 2026 outage affected some Triple Zero calls. Regulatory outcomes and customer claims are uncertain and Telstra cannot reliably estimate them (annual report, events after the reporting date). Spending may not earn its return. Strategic investment was A$457 million in FY26 and BAU capex was A$3,365 million, and FY27 BAU capex may reach A$3.65 billion. The Aura Network case depends on contracts that turn into revenue. Debt is rising. Net debt rose 5.2% to A$17,301 million at June 30, 2026, and the buy-backs move funding toward debt. Debt servicing was 2.0 times. Revenue is flat. Total income fell 0.9% in FY26. Telstra is still resetting its Fixed Enterprise business, and growth depends on mobile prices and users. Currency. The ADR trades in US dollars, but Telstra earns and pays dividends in Australian dollars. A fall in the Australian dollar lowers the ADR price for the same share price in Australia.
Balance sheet: added: At June 30, 2026, Telstra's gross debt was A$18,404 million. It was made of borrowings of A$15,512 million and lease liabilities of A$3,091 million, less net derivative financial instruments of A$199 million. Net debt rose by A$856 million to A$17,301 million. Debt servicing (net debt over EBITDA) was 2.0 times, and 1.9 times on an underlying basis. Telstra had 11,139,136,247 shares on issue, against 11,385,028,987 a year earlier, after the A$1.25 billion buy-back. The final dividend of A$0.105 per share is 90.5% franked. All amounts are in Australian dollars. As of Jun 30, 2026.
Checkpoints: added: Feb 18, 2027: FY27 half-year results: guidance on track. Pending. Watch: Growth in underlying EBITDAaL that keeps the FY27 guidance of A$8.5 billion to A$8.8 billion on track passes; a cut to guidance fails. Aug 12, 2027: FY27 results: cash earnings per share. Pending. Watch: Cash EPS of 27 cents or more for FY27 passes; less fails. 2027 (estimate): July 2026 outage: regulator outcome and costs. Pending. Watch: A regulator outcome and customer costs that Telstra can size and absorb inside its FY27 guidance pass; costs that force a guidance cut fail.
Recent events: added: Aug 13, 2026: Telstra reported FY26 results. Underlying EBITDAaL rose 4.0% to A$8,341 million, cash EPS rose 13.8% to 25.5 cents, and net profit after tax rose 2.7% to A$2.4 billion. The final dividend is 10.5 cents per share, 90.5% franked, for a total of 21 cents. Telstra announced a new on-market buy-back of up to A$1 billion and gave FY27 guidance. Aug 13, 2026: Telstra raised its expected strategic investment in the Aura Network and Viasat to about A$1.8 billion from FY23 to FY28, from about A$1.6 billion, because of inflation and project factors. It expects a mid-teens IRR and a payback of about nine years on the Aura Network. Jul 8, 2026: A network outage hit some mobile calls and data services, including some Triple Zero calls. Telstra said that its own undocumented network design change and a software update that had not been applied caused it. It has received one regulatory notice, expects more, and commissioned an external expert review. Jun 4, 2026: Telstra completed its on-market buy-back of A$1.25 billion. It bought 245,892,740 shares at an average price of A$5.08 and cancelled them. Feb 19, 2026: At its half-year results, Telstra raised its FY26 on-market buy-back from up to A$1.0 billion to up to A$1.25 billion.