Deutsche Telekom’s Twin Headwinds: Buyback Pause and Merger Jitters Overshadow Stellar Earnings
26.06.2026 - 13:47:38 | boerse-global.de
The chasm between Deutsche Telekom’s operational performance and its stock price has rarely been wider. The shares now trade at €26.13, barely 1.6% above their 52-week low of €25.71, after losing nearly a quarter of their value since February. Yet the company just delivered a first-quarter revenue jump of 4.7% to €29.9 billion and an EBITDA AL increase of 7.5% to €11.5 billion, prompting management to raise full-year guidance. The market’s indifference is puzzling — and two fresh developments threaten to keep the stock pinned down.
A report from the Wall Street Journal has added a layer of uncertainty. According to the article, early-stage discussions are underway to create a new multinational holding company that would merge Deutsche Telekom with its U.S. subsidiary T-Mobile US. The structure would reportedly involve a pure share-exchange offer, reminiscent of the Linde-Praxair dual-listing model. Investors are nervous: regulatory hurdles and potential dilution loom large. Any such deal would require approval from Berlin, as the German government and state-owned KfW collectively hold about 28% of the stock.
Meanwhile, a crucial source of buying support is disappearing. The second tranche of Deutsche Telekom’s share buyback programme concluded on Friday. Since April, the company spent up to €550 million repurchasing nearly 17 million shares. In the final week alone it bought back 1.65 million shares. With that tranche closed, a reliable demand anchor vanishes from July onward. The overall buyback envelope for 2026 remains at up to €2 billion, but the start date for a third tranche has not been announced. The company redeems most of the acquired shares, boosting earnings per share for remaining holders.
Should investors sell immediately? Or is it worth buying Deutsche Telekom?
Operational strength continues to accumulate. The EBITDA AL target for 2026 now stands at roughly €47.5 billion, free cash flow AL is expected to exceed €19.8 billion, and adjusted earnings per share are pegged at around €2.20. Rating agency Fitch recently upgraded Deutsche Telekom’s credit rating to A-, citing strong cash generation from the U.S. business. The company also secured labour peace: a wage deal struck with ver.di in late May, running 33 months until end-2028, lifts total compensation by 8.5% and rules out compulsory redundancies. Some 60,000 employees will see a phased increase in the additional monthly bonus, from €190 to €340 in August 2026 and further to €480 in July 2027, with a 2.4% pay-scale rise in June 2028.
Technical indicators reinforce the sense of a disconnect. The relative strength index stands at 31.7, deep in oversold territory. Over the past 30 days the stock has shed more than 11%. Yet the market is ignoring both the robust fundamentals and the clear valuation gap. The next scheduled catalyst is the second-quarter earnings release on 6 August 2026. Management’s comments on the U.S. merger speculation during that call could prove decisive — without clarity, uncertainty will likely continue to cap any recovery.
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