Is Telstra about to pull one of those amazing rabbits from the earnings upgrade hat?
The once spurned Telco is now flavour of the month with all past sins forgiven.
It’s amazing what a successful share issue and divorce does for the market perception.
After a while the newly freed partners are looked at differently. Now new dance partners appear and a better appreciation quite often follows with suitors and even one time bears start appearing on the scene.
Including those hard-nosed Telco analysts who valued TLS down around $3.60 a share (I think both Macquarie and Citigroup were among the gloomiest of the lot)last year during the great bear attack of 2006 in the run up to the T3 sale.
The reason for these musings is the very sharp rally in TLS shares yesterday: up 13c or three per cent in a market which went sideways after Monday’s record run.
TLS shares finished at $4.35 and the partly paid instalments at $2.92. More than 55 million fully paid shares were traded and more than 64 million instalments were traded on top of that.
Telstra shares have risen almost eight per cent since January 4 and more than 70 cents, or 20 per cent since touching $3.58 in late October as the T3 sale process was getting underway.
The rally since early this month should be enough to spark a gentle speeding inquiry from the ASX, especially after yesterday’s heavy volume and sharp price rise.
The chat around the market that a profit upgrade is coming from the giant as the benefits of Sol Trujillo’s revamp plan become more apparent.
First half earnings will still be off but the expectation is that the forecast second half rebound will be better than expected.
But we know with TLS there’s always a long way between the promise and the reality.
Around a year ago TLS in its long decline as the bears started homing in on the stock and the chatterers started homing in on Sol.
The shares were trading around the $4.05-$4.10 mark a year ago. Yesterday’s close is the highest since around November 2005.
