Deutsche Telekom’s Perfect Storm: Buyback Expiry Coincides with Merger Uncertainty as Stock Hovers Near 52-Week Low
26.06.2026 - 04:23:13 | boerse-global.de
The disconnect between Deutsche Telekom’s solid operational performance and its languishing share price has rarely been wider, and the coming weeks will test whether the market can look beyond two looming headwinds. The stock, currently trading at €26.15, sits just 1.7% above its 52-week low of €25.71, having shed roughly 24% since February’s high. Just as the company’s fundamentals are earning upgrades from rating agencies and prompting management to raise guidance, a key support mechanism is vanishing and a new overhang is taking shape.
The most immediate blow comes from the expiration of the second tranche of Deutsche Telekom’s buyback programme, which ends on 30 June. Since April, the Bonn-based group has repurchased nearly 17 million of its own shares at a cost of up to €550 million, including 1.65 million shares bought last week alone. The withdrawal of that consistent demand from the market leaves the stock without a reliable buyer starting in July. While the management has penciled in total buybacks of up to €2 billion for the full year, the timing of a third tranche has not yet been announced. Most of the repurchased shares are cancelled, boosting earnings per share, but the near-term absence of that cushion is weighing on sentiment.
Compounding the loss of buyback support is a report from the Wall Street Journal that early-stage discussions are underway to create a new multinational holding company that would combine Deutsche Telekom with its U.S. subsidiary T-Mobile US. The structure would reportedly involve a pure share-exchange offer, drawing comparisons to the dual-listing model used by Linde and Praxair. Investors have reacted nervously, fretting over potential regulatory hurdles and the risk of dilution to existing stakes. The German government and KfW together hold roughly 28% of Deutsche Telekom’s equity, meaning Berlin would have to approve any such deal, adding another layer of uncertainty.
Should investors sell immediately? Or is it worth buying Deutsche Telekom?
All this unfolds against a backdrop of robust operating performance that the market so far has chosen to ignore. In the first quarter, organic revenue climbed 4.7% to €29.9 billion, while adjusted operating profit rose 7.5% to €11.5 billion. The strong showing prompted management to lift its full-year targets, and the company now expects free cash flow of more than €19.8 billion by 2026. Fitch recently underscored the strength of the business by upgrading Deutsche Telekom’s credit rating to A-, citing the powerful cash generation from the U.S. operations. The group is aiming to generate €15 billion in excess cash flow by 2027.
On the labour front, Deutsche Telekom secured planning stability in late May by reaching a new collective bargaining agreement with the ver.di union. The deal runs through to the end of 2028 and includes total wage increases of 8.5% over its term, while ruling out compulsory redundancies. That removes a potential distraction from the HR side, but has done little to stem the share’s decline.
Technically, the stock shows signs of being deeply oversold. Over the past 30 days it has lost more than 11%, driving the relative strength index to 31.7 – nearing the threshold that often signals a bounce. Yet with the buyback prop removed and the holding-company speculation hanging overhead, the near-term direction hinges on the next major catalyst.
That catalyst is scheduled for 6 August, when Deutsche Telekom reports second-quarter results. Investors will be listening closely for any clarity on the U.S. strategy, whether management dismisses the merger rumours or provides more detail. Until then, the absence of the buyback cushion and the persistent uncertainty over the group’s corporate structure are likely to keep the stock pinned near its lows. Even as the company quietly switches off its MMS messaging service on 30 June in favour of the RCS standard, the market’s attention remains fixed on bigger questions – and the answers are at least five weeks away.
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