Making a credible statement

Research evidence excerpt

Equity Research

European Telecom Services

10 August 2026

Deutsche Telekom AG

Making a credible statement

Results were broadly in line and guidance edged up.

Uncertainties remain (notably the 'HoldCo'), but

management's conviction (and ours) that the stock is

undervalued is now backed by an increased SBB, fully

supported by strong operating trends and balance sheet.

OVERWEIGHT

DTEGn.DE/DTE GY

Unchanged

NEUTRAL

European Telecom Services

Unchanged

EUR 35.00

Price Target

Once again DTE published solid results and edged up its guidance with re-assuring

messages on German trends for 2H26. As discussed in DTE- Concerns, risks...and valuation

- 1 July 2026, the stock was impacted in 1H26 by a number of concerns (rising competition

in the US, risk of satellite disruption, concerns about the press-reported 1 creation of a

‘HoldCo’ merging DTE and TMUS). We had flagged that the impact of these factors on the

stock price was, in our view, excessive and hard to rationalise. Since then, the stock has

recovered as some of these overhangs have begun to recede: 1/Concerns of satellite

disruption ‘crossed’ the Atlantic impacting other European telecoms stocks but not DTE as

it was already ‘priced’ in. We continue to consider that satellites do not pose a risk to mobile

(lack of spectrum, capacity, indoor coverage) but is a relevant threat to fixed, notably in the US

but also to a lesser extent in Europe (see report above). 2/Concerns about the US telecom

market competition are still valid but TMUS continues to deliver the fastest growth in 2Q. 3/

Regarding the ‘Holdco’ risk: we still do not see clear merits in such a deal and continue to see

potential dilution risk for DTE’s minorities, which, in our view, are better off by DTE continuing to

increase its stake in TMUS rather than paying a premium in a full merger scenario. Management

did not comment directly, but indicated that it did not see relevant strategic/operating

constraints from the current structure of the group. As such, it remains difficult, in our view, to

identify a positive narrative for such a deal. In this uncertain context, management's decision to

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