Deutsche Telekom Holds JPMorgan's Confidence Even as Merger Doubts Linger
Published on 10/29/2026 at 12:51 | Editorial boerse-global.de
JPMorgan has reiterated its "Overweight" rating and 38-euro price target on Deutsche Telekom, keeping a constructive stance on the stock even while flagging that uncertainty over a potential merger with its US subsidiary remains a drag. Analyst Akhil Dattani described the figures from T-Mobile US, along with the unit's adjusted full-year guidance ranges, as broadly in line with expectations — a more measured read than the upbeat market reaction that greeted the release.
That distinction matters for investors: strong operating results and relief on strategic worries are two different drivers of a share price. Nothing in Dattani's assessment points to an earnings surprise relative to his forecasts. His positive investment view stands alongside the risk factor he explicitly names.
No Formal Offer — For Now
Citing Reuters, the report said Deutsche Telekom will hold off, for the time being, on submitting a formal offer for a merger with its US daughter company. Opposition from the works council is cited as one reason. A later revival of the plans remains possible. Both companies declined to comment, according to Reuters.
The project is therefore not off the table for good. The reported decision to refrain from a formal bid may calm critical investors for the moment, but it does not fully clear the strategic fog. This is precisely where short-term relief and JPMorgan's more cautious framing part ways.
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dpa-AFX attributed the pre-market tailwind to both the stronger-than-expected subscriber numbers at the US subsidiary and the shelved combination plans. In the agency's reading, the pause eased the concerns of skeptical investors. The stock was up 1.6% on the day, consistent with that relief response.
Operating Strength Still Has to Prove Itself Group-Wide
The T-Mobile US results published yesterday also offer operational support. In the third quarter of 2026, service revenues reached USD 19.4 billion, 6% above the prior-year period.
Growth alone is not the whole story, though — what matters is the bar that had already been set. Where dpa-AFX highlighted the subscriber figures as a positive surprise, JPMorgan characterized the numbers and the adjusted target ranges as largely expected.
Net profit at the subsidiary came in at USD 3.5 billion, an increase of 27%. T-Mobile US also raised its guidance for profitability and free cash flow.
The US unit reported postpaid net additions and a postpaid ARPA above its original expectations for the third quarter of 2026. That sets a better-than-anticipated business performance against worries about tougher US competition — though on its own it is not enough for the all-clear.
Verizon's Surge Is the Counterargument
The bear case starts with the competitive picture. According to media reports, stronger-than-expected subscriber gains at Verizon contributed to concerns about T-Mobile US and to pressure on Deutsche Telekom shares. The subsidiary's positive release does not erase that risk: both companies can win customers at the same time.
Verizon reportedly notched 406,000 new mobile contract customers, against 44,000 in the year-earlier period. That scale explains why investors are watching T-Mobile US more closely.
Still, Verizon's figures do not imply an equally large customer loss at the Telekom subsidiary. The risk is rather that its positive surprise fails to become a lasting trend. Should future commentary point to weaker growth, yesterday's release would lose its explanatory power for the road ahead.
A prudent assessment therefore has to weigh both sides: T-Mobile US beat its original expectations, yet the question of how resilient that performance is against a more aggressive rival stays open.
What the November Report Must Deliver
The next concrete test arrives on November 5, 2026, when the group publishes its financial results for the third quarter of 2026. Until then, the US subsidiary's positive operating trajectory and the unresolved strategic question sit side by side. JPMorgan's confirmed rating signals confidence, but it is expressly not an all-clear on merger uncertainty.
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At its AI investor day on October 5, Deutsche Telekom confirmed its guidance and medium-term targets. That confirmed framework is the reference point for the upcoming report. The US results provide a positive marker for it, but do not substitute for an assessment of the entire group.
The key question is how durable the postpaid subscriber growth proves to be. Yesterday's release suggests T-Mobile US exceeded its original net-addition expectations — an important signal for gauging competition, since a rival's stronger numbers do not automatically mean the Telekom subsidiary is missing its own targets. Equally important is the line between original planning and future growth: beating a starting benchmark does not yet answer whether the pace can be sustained.
The postpaid ARPA, which also came in above original expectations, complements the subscriber signal, and the two data points should be read together. An analysis based on net additions alone would ignore the second positive element of the release; conversely, it would be premature to derive a higher group forecast from it.
The bullish scenario would be a coherent link between US customer gains, postpaid ARPA and group targets. If that connection holds, yesterday's results could put the recent competitive worries into perspective. The point would not be that competition disappears — rather, that T-Mobile US can show successful growth is possible despite it.
As long as further subscriber gains support the confirmed target framework, the US release argues against an exclusively negative view of the competitive situation. If the growth outlook tips the other way, a one-off beat of original expectations is unlikely to be enough to dispel the concerns for good. For investors, the yardstick is clear: the headline about exceeded expectations should not decide matters on its own, but rather what it means for the group's trajectory. The November 5 report is the next catalyst — until then, the surprise is a substantial counterargument to the competition worries, but not yet confirmation of a durably better growth path.
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