German telecommunications giant Deutsche Telekom witnesses surge in subsidiary performance – shares jump once more
Following T-Mobile US's impressive Q2 2025 operational performance and raised full-year guidance, analysts have upgraded their views on Deutsche Telekom’s earnings prospects.
In Q2, T-Mobile US reported revenue of $21.13 billion, a nearly 7% year-over-year increase, and net income of $3.22 billion. The company added 1.73 million postpaid subscribers in Q2, bringing the total to 132.8 million. This strong performance led T-Mobile to raise its 2025 guidance for postpaid net adds (6.1–6.4 million from 5.5–6 million previously), adjusted EBITDA ($33.3–$33.7 billion), and free cash flow ($17.6–$18 billion).
As Deutsche Telekom is a majority owner of T-Mobile US, these improved results and guidance have bolstered Deutsche Telekom’s outlook. Deutsche Telekom reported Q1 EPS of $0.53, beating estimates and with quarterly revenue significantly above consensus at $33.37 billion versus $29.43 billion expected.
Analysts predict Deutsche Telekom will post an EPS of 1.86 for the current fiscal year. The company expects annual revenue growth of 3.5% to 4.0% in 2025, driven primarily by strong mobile service revenue growth across regions, including the US business. EBITDA is forecasted to grow in line with robust operational performance.
JPMorgan analyst Akhil Dattani described himself as "euphoric" about the T-Mobile US results, raising his price target for Deutsche Telekom's stock from €43.00 to €43.50. He maintained an "overweight" rating for Deutsche Telekom's stock, with an upside potential of around 40 percent at current levels. T-Mobile US shares jumped by around five percent following the quarterly results.
UBS analyst John C. Hodulik praised T-Mobile US for exceeding expectations in a volatile environment, maintaining a $300 price target and a "buy" rating for the company, seeing over 20 percent upside even after the recent price increase. The number of new customers at T-Mobile US was surprisingly high and well-received by the market.
For those looking to trade T-Mobile US in the short term, DER AKTIONÄR TV provides a trading tip. However, T-Mobile US is considered more speculative by DER AKTIONÄR. Investors anticipate the parent company's results in two weeks with optimism.
It's important to note that the positive market reaction to T-Mobile's results suggests a continued upward trend for the stock. Conflict of Interest Disclosure: Mr. Bernd Förtsch, the management and majority shareholder of the publisher Boerse-Medien AG, holds positions in Deutsche Telekom NA.
In conclusion, T-Mobile US's robust operational execution and upgrades to its financial guidance have positively impacted Deutsche Telekom’s earnings forecasts. This has translated into raised revenue and EPS forecasts for Deutsche Telekom for 2025, supported by strong cash flow expectations from its US subsidiary.
Deutsche Telekom's financial prospects have been enhanced due to the improved results and guidance from its majority-owned company, T-Mobile US. The robust performance of T-Mobile US is projected to boost Deutsche Telekom's revenue and EPS in 2025, with strong cash flow expectations contributing to these figures.
