Deutsche Telekom: Defensive Strength Meets Merger Headwind as Buyback Tranche Nears End
Published on 06/24/2026 at 14:05 | Redaktion boerse-global.de
Deutsche Telekom is caught in a classic tug-of-war. On one side, a rare credit-rating upgrade, a near-completed share buyback, and solid operational momentum argue for a floor under the stock. On the other side, a single Wall Street Journal report about a potential restructuring with T-Mobile US has created an overhang that has erased all those positive signals from the price. The result: a stock that is technically oversold, yet unable to shake the shadow of merger uncertainty.
The rating agency Fitch provided fresh ammunition for the bulls this week, lifting Deutsche Telekom’s long-term default rating to A- with a stable outlook. The upgrade was pinned squarely on the growing contribution from T-Mobile US, where the Bonn-based group has steadily increased its stake. That ownership has helped swell free cash flow at the parent level, giving management the flexibility to fund both investment and buybacks. Barclays, meanwhile, added its own tailwind by upgrading German telecom rivals 1&1 and United Internet, citing consolidation potential in the domestic market — a move that implicitly brightens the outlook for the sector leader as well.
Yet these fundamentals are being drowned out by the noise from a mid-June Wall Street Journal story. The report outlined early-stage discussions about creating a multinational holding company that would combine Deutsche Telekom with T-Mobile US, modelled loosely on the Linde-Praxair merger with dual listings in the United States and Europe. The newspaper cautioned that the talks were preliminary, details could change, and political backing would be needed — but the damage to sentiment was immediate. Deutsche Telekom declined to comment on what it called speculation about corporate activities. Since the story appeared on June 11, the stock has struggled to reclaim ground.
Should investors sell immediately? Or is it worth buying Deutsche Telekom?
At the latest count, shares in Deutsche Telekom were changing hands at 26.32 euros, a marginal loss on the day but a full 23 percent below the 52-week high of 34.35 euros set in 2025. The relative strength index has slid to 32.5 — deeply into oversold territory and a sign that the selling pressure may be exhausting itself. The stock’s distance from its 50-day moving average stands at minus 6 percent, underlining the extended correction phase.
All of this has happened even as the company delivered one of its strongest quarters in recent memory. In the first three months of 2026, organic revenue rose 4.7 percent to 29.9 billion euros, while adjusted EBITDA after leasing climbed 7.5 percent to 11.5 billion euros. Management responded by lifting its full-year guidance: it now expects adjusted EBITDA AL of around 47.5 billion euros and free cash flow after leasing above 19.8 billion euros. The operational backdrop also got a boost from a new labour agreement with the ver.di union, covering roughly 60,000 employees with an 8.5 percent wage increase over 33 months and a no-compulsory-layoff pledge through the end of 2028. And MagentaTV posted record viewership during the FIFA World Cup 2026: more than 6.5 million spectators per group-stage game and double the number of sign-ups compared with the home European Championship.
The buyback programme, meanwhile, continues to run on autopilot. The current second tranche, sized at up to 550 million euros, is due to close on June 30. Between June 8 and June 12, Deutsche Telekom repurchased roughly 1.6 million shares at an average price of 27.90 euros, bringing the total bought since the start of the programme on April 2 to 15.3 million shares. The overall 2026 buyback authorisation stands at up to 2 billion euros, most of which the company intends to retire, boosting earnings per share.
That buyback milestone comes just as the merger talk shows no signs of fading. Until the company provides clarity — or the speculation is put to rest — the market is likely to remain fixated on the deal narrative rather than the numbers. The next scheduled catalyst is the second-quarter earnings release on August 6, but even that may not shift the focus unless management explicitly addresses the holding-company question.
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