---
endpoint: analytics
pattern: Telecoms
status: done
latency_ms: 194448
conversation_id: 55050dfb-1a06-43d2-931c-1ed2a97143ff
citations: 14
created: 2026-05-31 20:53:33Z
---

# Is CLSA incrementally more positive/negative on Telstra. If so, why?

# CLSA on Telstra (TLS AU) — Incrementally MORE NEGATIVE (in relative terms)

## Direct answer

CLSA's stance on Telstra has become **incrementally more negative** in the latest note ("Dreamtime journey", 28 May 2025), despite the headline target price actually rising. The reason is a widening gap between TLS's share price and CLSA's TP, alongside a sharper articulation of structural concerns.

- **Rating: HOLD** (unchanged since July 2024)
- **Target price: A$4.10** (raised from A$4.00 in February 2025 — fourth consecutive small TP increase) [1]
- **Implied total shareholder return: -8.3%** (vs +1.5% in Feb-25 and +3.8% in Jan-25 — i.e. the TSR signal has flipped from positive to negative) [3][13][14]
- New thesis title is more pointed: *"Significant self-healing required to achieve 2030 goal; HLD"* [5]

## Evolution of CLSA's view on TLS (RMS coverage)

| Date | Note | Rating | TP (A$) | TP Δ | TSR | Net signal |
| --- | --- | --- | --- | --- | --- | --- |
| 27 May 2025 | Dreamtime journey | HOLD | 4.10 | +A$0.10 | **-8.3%** [3] | More cautious |
| 20 Feb 2025 | Game Changer | HOLD | 4.00 | +A$0.10 | +1.5% [14] | Neutral |
| 27 Jan 2025 | Star crossed | HOLD | 3.90 | +A$0.20 | +3.8% [13] | Neutral |
| Older (2024) | Price riddle / NAS | U-PF → HLD | 3.70 area | — | — | Recovered to neutral |

Note: TP has moved up a cumulative A$0.40 since January 2025, but the share price has run far harder — leaving CLSA's implied TSR clearly negative for the first time in this sequence.

## Why CLSA is incrementally MORE negative

### 1. Share price has run ahead of the (modestly upgraded) fundamentals
TLS has rallied **+34.6% absolute and +24.4% relative to ASX200 over 12 months**, +15.6% over 3 months, and +7.0% over 1 month into the May report [7]. CLSA's TP increases (A$3.70 → A$4.10 since late 2024) have not kept pace — the implied downside to share price is now **-13.7%** versus only -1.3% in the January note. The buy-side TSR signal has therefore gone from marginally positive to clearly negative across just four months [3][13].

### 2. EPS upgrades have thinned out
- **Feb 2025 (Game Changer)**: FY25/FY26/FY27 EPS upgrades of **+2.5% / +2.9% / +4.5%** on the 1H25 EBITDA beat, lower tax, and 50% weighting of the proposed A$750m buyback [9].
- **May 2025 (Dreamtime journey)**: FY26/FY27/FY28 EPS changes of just **-0.3% / +3.0% / -1.0%** — i.e. small, mixed and largely offsetting (lower interest costs and buyback offset by FY25 EBITDA guidance and D&A) [2][4].

So the engine of TP upgrades — earnings revisions — has clearly decelerated. The May TP increase comes more from a **roll-forward in the valuation window (April 2026 → July 2026)** than from a fundamental upgrade [1].

### 3. Sharper structural concerns about the 2030 strategy
The May note is the most explicit yet in challenging Telstra's framing of its competitive moat:
- CLSA writes that *"TLS's ability to differentiate its 'core connectivity' offering remains a significant risk to TLS achieving 2030 ROIC targets"* (target: ROIC >10% by 2030) [5].
- On the new "Network as a Product" (NaaP) strategy: *"increasing adoption of 3rd party software to manage telecom networks dynamically… has the potential to put local incumbents like TLS on a collision course with operators with greater software buying scale and reduce, in a relative sense the importance of infrastructure in the ground"* [8].
- The flagship **Aduna** partnership (mentioned repeatedly by management) is dismissed: *"the partnership with Aduna… is not exclusive and both Singtel and Vodafone (major TPG telecom shareholder…) are parties to the agreement meaning it is hard for us to see meaningful opportunities for Telstra to differentiate"* [6].

This continues a multi-quarter pattern in which CLSA frames each new TLS initiative as defensive rather than differentiating. In January (Starlink JV) they wrote *"these initiatives are defensive moves and are unlikely to yield meaningful differentiation"* [12], and in February (LEO regulator change) they reiterated the LEO satellite technology as a *"key risk factor"* on TLS dominance [11].

### 4. Valuation methodology already discounts the outlook
CLSA continues to apply a **6.4x 12-month forward EV/EBITDA multiple "at a slight discount to the historic one-year forward average, reflecting low confidence in the outlook"** [1]. WACC of 6.8% and TGR of 1.5% are unchanged across the three reports [1][9][10]. In other words, the modest TP creep does not reflect a change in conviction — it reflects mechanical roll-forward and small earnings tweaks.

## Bottom line

CLSA's *absolute* stance on Telstra is marginally more positive in May 2025 than in January 2025 — TP A$4.10 vs A$3.90, modest EPS upgrades, recognition of the A$750m buyback and reiterated FY25 guidance. But on every *relative* metric that matters for an investment call — implied downside to share price, TSR, the strength of the structural thesis, and the thinning of EPS revisions — CLSA has become **incrementally more cautious**, with the May "Dreamtime journey" note framing the 2030 strategy as requiring "significant self-healing" and arguing that core connectivity differentiation is at risk from software-defined networks, non-exclusive partnerships (Aduna), and LEO satellite competition [5][6][8].

---

**Sources**
[1][2][3][4][5][6][7][8] Telstra — HLD (Dreamtime journey) — CLSA (27 May 2025) — 607960654LinqAlpha.PDF
[9][11][14] Telstra — HLD (Game Changer) — CLSA (20 Feb 2025) — 607951211LinqAlpha.PDF
[10][12][13] Telstra — HLD (Star crossed) — CLSA (27 Jan 2025) — 607949125LinqAlpha.PDF

## Citations

- [1] **607960654LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960654LinqAlpha.PDF>
- [2] **607960654LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960654LinqAlpha.PDF>
- [3] **607960654LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960654LinqAlpha.PDF>
- [4] **607960654LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960654LinqAlpha.PDF>
- [5] **607960654LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960654LinqAlpha.PDF>
- [6] **607960654LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960654LinqAlpha.PDF>
- [7] **607960654LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960654LinqAlpha.PDF>
- [8] **607960654LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960654LinqAlpha.PDF>
- [9] **607951211LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/02/607951211LinqAlpha.PDF>
- [10] **607949125LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/01/607949125LinqAlpha.PDF>
- [11] **607951211LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/02/607951211LinqAlpha.PDF>
- [12] **607949125LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/01/607949125LinqAlpha.PDF>
- [13] **607949125LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/01/607949125LinqAlpha.PDF>
- [14] **607951211LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/02/607951211LinqAlpha.PDF>

