Deutsche Telekom Near Year Low Despite €560M Buyback; UBS Sees Merger Panic as Overdone
Published on 07/05/2026 at 15:13 | Redaktion boerse-global.de
Deutsche Telekom shares are clinging to levels just above a 52-week trough as a perfect storm of merger rumors, sector weakness, and operational friction at its US subsidiary clobbers investor sentiment — even as the company ploughs ahead with a hefty buyback program. The stock ended Friday at €25.20, down 4.22% on the week and 10.16% over the past month, leaving it 26.64% below its February high of €34.35. Earlier in the week it scraped a 52-week low of €23.54.
Analysts at UBS argue the selloff is overdone, particularly the anxiety swirling around a potential full merger with T?Mobile US. The German group already controls 54% of the US carrier and its operations, and any further accumulation faces formidable regulatory roadblocks: the German government holds a 28.6% stake, and foreign investment rules for critical infrastructure are tight. “The fear of a costly takeover is exaggerated,” the bank said, reiterating its Buy rating and €36.60 price target. It points to an attractive valuation, double-digit earnings growth, a dividend yield of around 4.4%, and the ongoing share repurchases as supporting factors.
Yet the overhang from T?Mobile US extends beyond merger talk. The subsidiary is preparing to switch off its 2G network on August 3, 2026, freeing up spectrum for 5G and 6G. At the same time, it is embroiled in a legal tussle with Broadcom over VMware licensing fees, forcing the migration of more than 300,000 CPU cores and over 1,000 applications. A temporary injunction guarantees Broadcom support until early August, but the transition adds a layer of operational uncertainty that is unlikely to dissipate quickly.
Should investors sell immediately? Or is it worth buying Deutsche Telekom?
On the capital returns front, Deutsche Telekom launched the third tranche of its €2 billion buyback program on July 1, with plans to spend up to €560 million by the end of September. So far, the company has repurchased over 35 million shares for roughly €1 billion. The buyback provides a backstop, though the stock’s RSI of 36.9 signals it is oversold without yet being exhausted.
Barclays is also treading carefully. The bank trimmed its price target to €36.50, flagging the rising competitive threat from satellite?based services such as Starlink and the potential impact of EU?wide frequency auction harmonization on future network costs. Technically, the stock trades 12.43% below its 200?day moving average of €28.78 and 8.49% below its 50?day average, underscoring the bearish grip on the price action.
The next major catalyst arrives on August 6, when Deutsche Telekom reports second?quarter and first?half numbers. Investors will be listening closely for management’s stance on a T?Mobile US merger; a clear rebuttal could lift a key uncertainty. The free?cash?flow target of roughly €19.8 billion for 2026 remains a central metric. Separately, Dr. Uwe Heckert has taken over as CEO of the consulting arm Detecon, a modest leadership change that reflects ongoing internal reorganisation. Until the earnings call, the stock is likely to remain hostage to headlines from the US telecom sector.
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