JPMorgan Calls Deutsche Telekom's Valuation a Bargain as Buyback Programme Nears €1.5 Billion
Published on 07/10/2026 at 10:54 | Redaktion boerse-global.de
The shares of Deutsche Telekom jumped 3.12 percent on Friday, reclaiming the top spot among DAX gainers after JPMorgan reaffirmed its conviction that the stock is worth 53 percent more than its current price. Analyst Akhil Dattani stuck with his €40 target and an "Overweight" rating, arguing that investors are increasingly finding it hard to look past a valuation that he considers deeply undemanding.
The move lifted the stock to €26.08, a notable rebound from the 52-week low of €23.54 touched on 30 June. Since that trough, the shares have recovered roughly 10.8 percent, though they still trade almost 24 percent below the year's high of €34.35 reached in late February. Dattani acknowledged that strategic uncertainties have weighed on the stock since that peak, but he insisted that the fundamental picture remains solid, with double-digit earnings-per-share growth still on the cards.
That optimism is being underpinned by an aggressive capital-return programme. The company revealed that in the first three days of July it bought back 909,000 of its own shares on Xetra at an average price of €24.74, spending just under €22.5 million. The purchases form part of the third tranche of the 2026 buyback scheme, a €2 billion programme that began on 5 January and is scheduled to run until the end of the year. The first two tranches, completed by the end of June, accounted for more than 35 million shares at a combined cost of over €1 billion. The third tranche has a volume of up to €560 million and will continue until at least 30 September. Most of the repurchased stock is being cancelled, with a smaller portion reserved for executive compensation and employee participation.
Should investors sell immediately? Or is it worth buying Deutsche Telekom?
The buybacks are proceeding against a backdrop of persistent share-price weakness. Before Friday's rally, the stock had closed at €25.29 on Thursday — more than 26 percent below its 52-week high and only 7.4 percent above the June low. On a monthly basis the shares were down 11.2 percent, and the year-to-date loss stood at 9.26 percent. The relative strength index had fallen to 39.4, indicating no oversold condition but a clear bearish bias. Even after the Friday jump, the RSI settled at a neutral 47.6 points, while the stock still remained about 9 percent below its 200-day moving average.
Technical pressure aside, JPMorgan's Dattani sees two hidden strengths that the market has yet to price in: the US operations and the European network expansion. The group's private 5G campus network at the Container Terminal Altenwerder in Hamburg, built in partnership with HHLA, is a case in point. The project enables latency-free communication for automated port logistics and serves as a reference for future industrial applications that could boost business-customer revenue. The company also kicked off new fibre-optic rollout projects in the towns of Polling and Daaden on Friday.
For the full year 2026, management expects moderate revenue growth and adjusted EBITDA of around €47.5 billion. Analysts are pencilling in a dividend of about €1.13 per share for next year, maintaining the group's reputation as one of the more reliable payers in the DAX. The next major catalyst comes on 6 August, when the second-quarter interim report is due — the first real test of whether the earnings acceleration that Dattani anticipates is already visible in the numbers. Until then, the buyback machine keeps humming along, providing at least a partial floor under a stock that has spent much of the summer searching for its footing.
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