Telstra Group Shares (TLS) Hit Multi-Year High – What Next?

Telstra Group Limited (ASX:TLS) has broken through to a new 52-week high, reaching A$4.91 during intraday trading before settling slightly lower at A$4.88 into the close. This milestone marks a significant achievement for the telecommunications giant, with gains of 21% YTD, and 37.46% in 12 months painting a picture of outperformance. But what’s driving the surge in bullish sentiment in recent times, and can it be sustained?

The past year has been a period of intense activity for Telstra. A key factor underpinning the stock’s upward trajectory is the company’s aggressive acquisition strategy. The December 2023 acquisition of Versent, a cloud transformation and security services provider, for A$267.5 million, significantly bolstered Telstra’s capabilities in the rapidly growing cloud services and cybersecurity sectors, seen as areas that firms are reluctant to trim.

This strategic move aligns perfectly with Telstra’s broader ambition to expand its digital offerings and capitalize on the increasing demand for secure and reliable cloud solutions. The acquisition of Boost Mobile in December 2024 further solidified Telstra’s position in the prepaid mobile market, expanding its customer base and strengthening its competitive edge.

However, Telstra’s success isn’t solely attributable to acquisitions. The company has also been proactive in streamlining its operations and enhancing efficiency. The May 2024 announcement of a workforce reduction of 2,800 employees, primarily within the Telstra Enterprise division, reflects a commitment to adapting to technological advancements, particularly in the realm of artificial intelligence to improve profitability. While such decisions are never easy, analysts view this restructuring as a necessary step to optimize resource allocation and enhance long-term profitability. The strategy is to integrate AI technologies into the business, and the reduction in workforce supports that integration.

Furthermore, Telstra’s commitment to returning value to shareholders has played a crucial role in boosting investor sentiment. The A$750 million equity buyback program, announced in February 2025, underscores the company’s strong financial position and its confidence in future performance. Coupled with a historically high dividend payout ratio, with a three-year median of 94%, Telstra has positioned itself as an attractive investment for income-seeking investors.

The strategic sale of its stake in Foxtel Management Pty Limited to DAZN Group Limited in April 2025 also contributed to the positive momentum. This divestment allows Telstra to sharpen its focus on its core telecommunications and technology services, freeing up capital for reinvestment in key growth areas.

Looking ahead, Telstra’s continued investment in its 5G network infrastructure is expected to be a key driver of future growth. The partnership with Ericsson to launch the first programmable 5G network in the Asia-Pacific region positions Telstra at the forefront of telecommunications technology, enabling it to support advanced applications and deliver enhanced network performance.

Analysts price targets have not kept pace with the current increase in share price, with the consensus of $4.76 sitting below price action. The high of $5.30 outlines some of the bull case, where the low of $4 reflects the bear view.

New highs can set about periods of price discovery, although with Testra’s shares having traded at the current levels back in 2016, almost 10 years ago, there may be some levels of friction where support or resistance was found in the past. A look at the 10 year chart above on monthly candles may help shed some light, with the A$5 level previously acting as both support and resistance at times of varying sentiment.