Morgans upgrades Telstra to 'hold' on higher mobile prices
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The news: Morgans has upgraded telco giant Telstra from 'reduce' to 'hold' and hiked its target price on expectations that mobile pricing will continue to increase.
The numbers: Morgans lifted its target price about 18% from $4 to $4.70. Telstra last closed at $4.86.
The context: Morgans analysts said that Telstra's recent investor day suggested mobile pricing in the telecommunications sector is likely to remain rational over the next five years. Morgan's previous 'reduce' recommendation on Telstra was based on an expectation that mobile prices would decline.
The analysts noted that both Telstra and rival telco TPG Telecom raised mobile prices in July, and TPG removed its six month discount last week.
Morgans also upgraded its price target on TPG (from $5 to $5.40) and fellow telco Superloop (from $3 to $3.50).
The source: Morgans research
