Is Deutsche Telekom (XTRA:DTE) Undervalued? A Fresh Look at the Numbers After Recent Share Price Weakness

Deutsche Telekom (XTRA:DTE) stock has recently caught the attention of investors following its mixed short-term performance. Over the past month, the share price has dipped by 8%, and over the past 3 months, it has slid 12%.

See our latest analysis for Deutsche Telekom.

After a period of strong long-term gains, Deutsche Telekom’s momentum has been fading. Despite a modest rebound in the last week, the share price is still down since the start of the year, and the 1-year total shareholder return trails the broader market. Nonetheless, multi-year investors have seen significant value created, with the 3-year total return reaching over 53% and the 5-year figure more than doubling their investment.

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With analysts projecting upside and the shares trading below their estimated fair value, the real question is whether Deutsche Telekom is genuinely undervalued right now, or if all future growth has already been priced in.

Most Popular Narrative: 27.5% Undervalued

With Deutsche Telekom’s current share price at €27.62 and the most-followed narrative calculating a fair value of €38.07, many are debating if the market is missing key upside drivers. The narrative’s logic centers on future earnings potential, network investment, and strategic partnerships.

Rapid AI and digital transformation initiatives, including AI-powered network management, customer support automation, and industrial AI collaborations (notably with NVIDIA), are expected to materially lower operating costs and increase efficiency, supporting margin expansion and higher free cash flow in the medium to long term.

Read the complete narrative.

Want to know the engine behind this ambitious fair value? Bold earnings forecasts, margin changes, and a future PE ratio much higher than today are all packed into the calculation. Which one tips the scale? See the surprising assumptions that justify this premium. They may not be what you expect.

Result: Fair Value of €38.07 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, slowing revenue growth in core European markets and heavy investment requirements for fiber networks could present challenges for Deutsche Telekom’s path to sustained margin expansion.

Find out about the key risks to this Deutsche Telekom narrative.

Build Your Own Deutsche Telekom Narrative

If you see the story differently or want to dig deeper into the numbers, you can craft your own narrative in just a few minutes. Do it your way.

A great starting point for your Deutsche Telekom research is our analysis highlighting 6 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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