Deutsche Telekom Keeps Buy Rating at Bank of America as Höttges Presses Berlin on T-Mobile US
Published on 11/09/2026 at 18:31 | Editorial boerse-global.de
Bank of America has trimmed its price target on Deutsche Telekom from EUR 36 to EUR 32 a share, yet the broker's buy recommendation stands. The cut stems not from any operational disappointment but from softer assumptions on cash flow, and it lands as the Bonn-based group pursues a twin agenda: extracting more financial headroom from a strong domestic business while its chief executive lobbies the German government for backing on a far larger corporate move.
The shares were trading at EUR 26.11, leaving the revised target comfortably above the market price. Bank of America thus still sees upside in the stock — just less of it than before. Its thinking rests on the interplay between business growth and the cash that growth throws off: solid revenue and rising operating profit support the valuation only insofar as they translate into sufficient free cash flow, and that is precisely where the bank has turned more conservative.
Home Market Provides the Operational Backing
The analysts had little to fault in the quarter just reported. Revenue in the Germany business reached EUR 6.6 billion, up 3.9%, with mobile service revenue ahead by 2.9%. That performance underpins the praise for the home market. Deutsche Bank likewise highlighted the Germany and Europe operations positively on Thursday and confirmed its own assessment, so the supportive analyst commentary clusters around the operating story even as Bank of America takes a more cautious view of expected cash generation.
Group-wide, free cash flow AL came in at EUR 5.7 billion in the most recent reporting quarter, an increase of 1.4%. The recently raised full-year guidance for that metric stands at EUR 20.1 billion. For investors, the test is straightforward: the operational strength argues in the telecoms group's favour provided it shows up in cash flow, and the durability of Bank of America's still-positive verdict will hinge largely on whether the company meets its financial targets.
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Munich Event Puts AI Infrastructure in Focus
Deutsche Telekom has announced a press conference in Munich on artificial intelligence infrastructure, billed as "KI-Fabrik 2.0: More Digital Sovereignty for Customers in Germany and Europe." The framing points squarely at infrastructure for customers in Germany and Europe.
Just over a week ago, T-Systems and Sparxity signed a letter of intent to collaborate on energy-efficient AI computing infrastructure. The plan covers the integration and validation of Sparxity's AI chips and computing systems for Telekom data centres, with the next chip generation slated for introduction in 2028. The agreement spans both chips and systems, with energy efficiency at the heart of the intended cooperation.
Höttges Sizes Up SpaceX — and a Bigger Worry
Chief executive Tim Höttges addressed SpaceX's mobile ambitions in a media report on Saturday. A competitive network requires local presence and a great deal of money, he said of the planned Starlink mobile offering. His larger concern, according to the report, is a new communications business model. He drew a comparison with the upheaval Tesla triggered in the automotive industry — a worry aimed at possible changes to the business model rather than merely at the construction of a rival network.
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On the corporate front, Handelsblatt reported on Wednesday, citing four insiders, that Höttges is seeking support from Chancellor Friedrich Merz and the German government for a merger of Deutsche Telekom with T-Mobile US. The group is scheduled to publish fourth-quarter and full-year 2026 financial results on 25 February 2027.
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