Deutsche Telekom: Operational robust, but M&A speculation clouds the horizon

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Deutsche Telekom: Operational robust, but M&A speculation clouds the horizon

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Deutsche Telekom

Operational robust, but M&A speculation

clouds the horizon

Reiterate Rating: BUY | PO: 36.00 EUR | Price: 27.62 EUR

Operationally robust, but merger reports adds uncertainty 13 May 2026

DT reported a constructive Q1, with its US subsidiary T‑Mobile US having already Equity

reported. German operations were in line with prior messaging, and broadband trends

remain robust, particularly against the backdrop of deterioration at Vodafone. Full‑year

Key Changesguidance appears secure. However, despite continued solid operational delivery, recent

merger speculation has introduced additional uncertainty to the investment case. The Q1 (EUR) Previous Current

call provided no incremental clarity, beyond management’s understandable refusal to Price Obj. 35.60 36.00

comment on unsubstantiated reports. While consistent with their approach, this does 2026E Rev (m) 122,148.1 122,388.9

little to mitigate near‑term volatility. Nevertheless, we reiterate our Buy recommendation. 2027E Rev (m) 126,200.7 126,926.5

DT remains historically inexpensive and well positioned to deliver compound double‑digit 2028E Rev (m) 130,139.3 131,239.9

growth in earnings and dividends per share. 2026E EPS 2.12 2.20

2027E EPS 2.62 2.66

2028E EPS 2.99 3.04Q1 call highlights

1) No comment on merger reports, 2) German MDU (multi-dwelling units) and rural SDU

(single) are fibre priorities, 3) E800m additional capex will move into German fibre, while David Wright >>

Research Analyst

build costs are 15% lower, 4) Fixed service revs (FSR) to accelerate H2 with April price MLI (UK)

increases, 5) No plans to proactively reduce minorities group wide, but will continue +44 20 7995 6355 dawright@bofa.com