Company Reports

Germany and the US are the only two markets that matter for Deutsche Telekom, as combined they represent more than 90% of the company's EBITDA after leases.

Deutsche Telekom delivered 4% organic revenue growth for the first half. Investors welcomed an expansion of the 2026 share-buyback program to EUR 5 billion from EUR 2 billion, making the shares jump 6% in Aug. 6 trading.

Germany and the US are the only two markets that matter for Deutsche Telekom, as combined they represent more than 90% of the company's EBITDA after leases.

Deutsche Telekom raised 2026 guidance slightly, and now expects EUR 47.5 billion in adjusted EBITDA after leases, or EBITDAaL, compared with EUR 47.4 billion previously. Service revenue growth was 4.6% year over year in organic terms, with T-Mobile US as the main driver.

Germany and the US are the only two markets that matter for Deutsche Telekom, because combined they represent more than 90% of Deutsche Telekom’s EBITDA after leases.

Deutsche Telekom delivered on its 2025 targets and issued guidance for EUR 47.4 billion in adjusted EBITDA after leases for 2026, which we expect management will raise during the year, as they always lean toward the conservative side.

The Morningstar Developed Markets Europe Communication Services Index has returned 23.7% year to date, thanks to renewed hopes for consolidation and modestly improving conditions in markets like Italy.

Germany and the US are the only two markets that matter for Deutsche Telekom, because combined they represent more than 90% of Deutsche Telekom’s EBITDA after leases.

Deutsche Telekom reported a 1.0% year-on-year increase in revenue to EUR 28.7 billion and a 1.7% rise in adjusted EBITDAaL to EUR 11.0 billion in the second quarter. Despite currency headwinds coming from a weakening US dollar, DT remains on track to meet its full-year guidance on an organic basis.

Deutsche Telekom’s first-quarter results were broadly in line with company-compiled consensus, with revenue of EUR 29.8 billion and EBITDA after leases of EUR 11.2 billion, up 6.5% and 10%, respectively.

Narrow-moat Deutsche Telekom delivered a strong 2024. Full-year revenue reached EUR 115.8 billion, up 3.4%, and adjusted EBITDA after leases rose to EUR 43 billion or 6.2%. Investors were somewhat disappointed by Deutsche Telekom’s adjusted EBITDAaL guidance though as management expects EUR 44.9 billion in 2025 compared with company-compiled consensus of EUR 46 billion. We believe it’s likely Deutsche Telekom will end up above EUR 44.9 billion as management normally guides conservatively and gradually raises its outlook over the year. We model EUR 45.1 billion in adjusted EBITDAaL in 2025, growing to EUR 47.6 billion in 2026. We raise our fair value estimate to EUR 31 from EUR 28 as we roll our model and update our forecasts. Shares remain slightly overvalued as of Feb. 26.

Germany and the US are the two only markets that matter for Deutsche Telekom, as combined they represent more than 90% of Deutsche Telekom’s EBITDA after leases.

Narrow-moat Deutsche Telekom’s third-quarter results were in line with company-compiled consensus. Adjusted EBITDA after leases was EUR 11.1 billion, up 6.2% year on year, driven once again by T-Mobile US. Management raised the full-year guidance slightly and now expects adjusted EBITDA after leases of EUR 43 billion compared with EUR 42.9 billion last quarter, in line with our estimates. We maintain our EUR 28 fair value estimate and view the shares as fairly valued, having outperformed European peers year to date.

We are raising our fair value estimate for narrow-moat Deutsche Telekom to EUR 28 from EUR 25 per share as we raise our medium-term forecasts after the firm’s capital markets day. We give credibility to management’s 2027 plan, which estimates group revenue will grow at a 4% compounded annual growth rate until 2027 and adjusted EBITDAaL at a 4%-6% rate. Our five-year group adjusted EBITDAaL CAGR sits at 4.6%, in line with management’s targets. Deutsche Telekom’s management has a long history of delivering (and surpassing) its long-term commitments with shareholders, which gives us greater confidence in the outlook. Shares now look fairly valued compared with our EUR 28 fair value estimate. Our capital allocation rating for Deutsche Telekom is Exemplary.

Germany and the US are the two only markets that matter for Deutsche Telekom, as combined they represent more than 90% of Deutsche Telekom’s EBITDA after leases.

Narrow-moat Deutsche Telekom’s second-quarter results came in ahead of FactSet consensus. Organic adjusted EBITDA after leases grew 6.6% year on year, driven once again by T-Mobile US, where EBITDAaL grew 9.1% year over year. Owing to the strong operational performance and a revised capital expenditure outlook, management raised guidance and now expects free cash flow after leases to be around EUR 19.0 billion, from EUR 18.9 billion previously. We maintain our EUR 25 fair value estimate and view the shares as fairly valued, having outperformed European peers year to date.

Narrow-moat Deutsche Telekom's first-quarter results were on track with organic adjusted EBITDA after leases growth of 5.8%, in line with guidance of 6%. The main driver of group EBITDAaL growth was T-Mobile US with 7.3% organic growth, which was followed by a more moderate 3.3% growth, excluding US Deutsche Telekom, which is outperforming its peers in the US and Germany and making slow, but steady market share gains. We maintain our EUR 25 fair value estimate, with shares undervalued by 15% and trading close to EUR 22.

Germany and the U.S. represent around 25% and 60% of Deutsche Telekom’s EBITDA, respectively. Instead of investing early in fiber-to-the-home Deutsche Telekom decided to upgrade its copper networks in Germany while charging incrementally higher prices when migrating customers to faster broadband speeds. Over the past decade, this has resulted in steady revenue growth in its German fixed-line segment, having one of the healthier growth rates in Europe. The firm will do a gradual rollout of FTTH during the next 10 years, something that will solidify its position as the broadband leader in the German market.

Narrow-moat Deutsche Telekom's results were satisfactory as expected. Management met all its guidance targets, gave a healthy outlook for 2024, and raised its dividend by 10% to EUR 0.77 per share, which had been announced in third-quarter 2023. For 2024, Deutsche Telekom expects adjusted EBITDA after leases to grow 6% to EUR 42.9 billion, compared with EUR 40.5 billion in 2023, and free cash flow to be up to EUR 19 billion from EUR 16 billion in 2023 as capital spending in the United States keeps declining. Execution in the U.S. and Germany remains strong. T-Mobile U.S. grew EBITDAaL by 3% due to higher service revenue and cost-controls. In Germany, Deutsche Telekom continues gaining market share from Vodafone in mobile and broadband, with EBITDAaL up 4.1% year over year. We maintain our EUR 25 fair value estimate for Deutsche Telekom. Despite Deutsche Telekom shares providing less upside than other European telecom companies under our coverage, it remains one of our preferred stocks. We like Deutsche Telekom’s strong competitive position in its core markets, reasonable dividend yield (3.5% as of Feb. 23), and its Exemplary Morningstar Capital Allocation Rating.

Narrow-moat Deutsche Telekom continues to outperform its European telecommunication peers. Shares are up 14% year to date supported by healthy revenue and EBITDA after leases performance in the U.S. and Germany. Management announced a dividend increase of 10%, from EUR 0.70 to EUR 0.77 per share, which represents a 3.5% yield. More importantly, this dividend yield is maintainable and we expect Deutsche Telekom will continue to raise dividends in the future due to its exposure to healthy markets. More importantly, this dividend yield is maintainable and we expect Deutsche Telekom will continue to raise dividends in the future due to its exposure to healthy markets, good cost management, and strong strategic execution. We remind investors that we assign Deutsche Telekom an Exemplary Morningstar Capital Allocation Rating. We maintain our EUR 25 fair value estimate, with shares offering 15% upside at this point.