Morgans Financial analyst Nick Harris has upgraded Telstra Corporation Ltd (ASX:TLS) to Hold from Reduce, raising his 12-month target price by 18% to A$4.70. The revised outlook reflects expectations of continued increases in mobile plan prices and a shift to an enterprise value-to-EBITDA (EV/EBITDA) valuation method.
The upgrade follows Telstra’s recent Investor Day, which Harris says reinforced the view that mobile pricing across the telecommunications sector will remain rational over the next five years. He pointed to July 2025 price increases by both Telstra and TPG Telecom’s Vodafone unit, and noted that TPG has since removed its six-month discount offer.
“Mobile pricing looks likely to continue to increase, not decrease,” Harris said.
His earlier Reduce rating was based on assumptions that mobile pricing would decline about three years into a generational network upgrade such as 5G, and that Telstra’s premium to its long-term valuation would narrow.
“Both seem unlikely so we upgrade our Telstra recommendation to Hold,” he added.
Telstra shares last traded at $4.890 and are 0.62% higher at midday.