Deutsche Telekom's Earnings Day Looms as the Merger Dream Fades
Published on 08/05/2026 at 20:41 | Redaktion boerse-global.de
The timing could hardly be more awkward. Just 24 hours before Deutsche Telekom is due to publish its second-quarter scorecard, the stock is sliding and the narrative that once propped up the share price has been pulled out from under it.
Shares in the Bonn-based group were changing hands at around €27.48 in Xetra trading on Wednesday, down roughly 1.7 percent on the day. The dip follows a report from Semafor, picked up by dpa-AFX, indicating that plans for a full-blown merger with US subsidiary T-Mobile US — a transaction reportedly valued in the region of $300 billion — have been shelved. Opposition from minority shareholders at the American arm and concerns raised by the Committee on Foreign Investment in the United States (CFIUS) are said to have been decisive factors. Market participants have also pointed to profit-taking after a recent bounce in the shares as a contributing factor to Wednesday's decline.
A Two-Front Test for the Bonn Group
Thursday's release, which covers both the second quarter and the first half of 2026, now carries a dual burden. Investors will be scrutinising whether the operating engine can carry the valuation without the merger premium, and whether the German home market is finally converting heavy network investment into visible financial returns.
The US business has traditionally been the earnings backbone of the group, and the numbers that T-Mobile US delivered on Tuesday offered some reassurance. Adjusted core EBITDA rose 12 percent to $9.5 billion in the quarter, while postpaid service revenues climbed 13 percent to $15.9 billion. The American operator added 277,000 net new postpaid customers, with average revenue per user (ARPU) landing at $152.91. Earnings per share of $2.99 came in ahead of expectations. T-Mobile US also reaffirmed its EBITDA guidance of $37.1 billion to $37.5 billion and lifted its free cash flow forecast to a range of $18.4 billion to $18.8 billion.
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Yet a cautious note on customer churn — the metric that measures how effectively the carrier retains subscribers amid intensifying 5G and fibre competition — tempered the mood. That single indicator could prove pivotal in determining whether the US operation's operational heft can compensate for the disappearance of the merger storyline.
Home Market Under the Microscope
With the US delivering, attention pivots to Germany. In the first quarter, domestic revenue rose 1.9 percent to €6.34 billion, or 2.1 percent on an organic basis. EBITDA AL increased 2.5 percent to €2.70 billion, with the margin reaching 42.6 percent. Fibre roll-out has now connected 13 million households. The question analysts and investors want answered is whether those substantial in-country investments are starting to pay off in faster revenue and margin growth — a test that observers regard as central to the group's credibility.
The consensus forecast for Thursday's report points to revenue of roughly €29.95 billion, EBITDA AL of €11.70 billion and free cash flow AL of €4.9 billion. For context, the first quarter delivered organic revenue growth of 4.7 percent to €29.9 billion, EBITDA AL of €11.5 billion, net profit of €2.6 billion and free cash flow AL of €5.7 billion. The full-year 2026 guidance calls for EBITDA AL of around €47.5 billion, up from €44.7 billion, and free cash flow above €19.8 billion versus €19.3 billion previously. Earnings per share for the year are projected at roughly €2.20.
Analysts Hold Their Ground Despite Cuts
The broker community has trimmed price targets but stopped well short of abandoning the stock. DZ Bank lowered its target from €37 to €35 on 31 July while keeping a "Buy" rating, citing the group's operational strength. JPMorgan followed suit on 27 July, cutting its target from €40 to €38 but maintaining an "Overweight" stance. Both levels remain comfortably above the current share price, and one analyst puts fair value at €35.
The bull case rests on the notion that the merger freeze is a postponement rather than a permanent failure. If Thursday's numbers meet expectations and US customer retention holds steady, the recent recovery could extend, with the shelved merger fading into the background as a topic for another day.
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What Could Go Wrong
The bearish scenario is a combination of regulatory overhang and operational softening. The churn caution from T-Mobile US could prove to be the first sign of a sustained trend, and any confirmation of that in the coming quarters would likely keep pressure on the shares. Meanwhile, the CFIUS concerns and minority shareholder resistance that scuppered the merger show no signs of evaporating, leaving the door open to prolonged uncertainty.
The chart tells its own story. At current levels, the stock sits roughly 20 percent below its 52-week high of €34.35, reached in late February, and about 3.85 percent under its 200-day moving average of €28.58 — a technical signal that the medium-term trend has turned. The dividend yield of approximately 3.5 percent offers some comfort for income-focused investors, but it has done little to arrest the slide of recent months.
The immediate catalyst is Thursday's report. Beyond that, the next checkpoint arrives on 5 November, when the group releases third-quarter figures. Between now and then, the market will be watching one number above all others: whether T-Mobile US can hold onto its customers.
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