Deutsche Telekom Shares Start Year Strong: Analyst Raises Forecast

Deutsche Telekom shares have delivered a robust performance in early 2025, climbing 15.6% since the start of the year to €32.16, supported by a wave of analyst upgrades and strong operational momentum from its key U.S. subsidiary. The German telecommunications giant has captured renewed market attention as investment banks raise their price targets, reflecting growing confidence in the company’s growth trajectory despite some headwinds.

JPMorgan has lifted its price target on Deutsche Telekom to €40 from €39, maintaining an Overweight rating on the shares. The revision signals the bank’s positive view on the telco’s fundamental strength and future earnings potential.

Separately, Citi analyst Georgios Ierodiaconou pushed his target even higher to €41 from €39, reiterating a Buy rating. These upgrades come at a time when Deutsche Telekom’s valuation is being reassessed by markets, particularly in light of the stellar performance delivered by T-Mobile US.

The U.S. subsidiary has emerged as a critical driver of Deutsche Telekom’s share price appreciation. T-Mobile US reported a 6% revenue increase to $17.4 billion in its latest quarter, accompanied by a 10% profit surge to $3.2 billion. Perhaps most impressively, the carrier added 830,000 new mobile customers during the three-month period, significantly outpacing analyst expectations. This customer growth underscores T-Mobile’s competitive positioning in the fiercely contested U.S. wireless market and validates Deutsche Telekom’s strategic focus on its American operations.

At the group level, Deutsche Telekom reported annual adjusted earnings before interest, taxes, depreciation, and amortization after leases of €43 billion, representing a 6.2% year-on-year increase. However, this figure fell marginally short of analyst projections of €43.2 billion. The company’s 2025 forecast also came in below market expectations, triggering a 3.8% share price decline on the day of the announcement. This reaction highlights the market’s sensitivity to forward guidance, even when underlying operational performance remains solid.

The dual narrative of strong subsidiary performance and modest earnings misses presents a nuanced picture for markets. On one hand, T-Mobile’s momentum provides a substantial earnings cushion and validates Deutsche Telekom’s transatlantic strategy. On the other, valuation concerns over T-Mobile US and intensifying competition in the German home market pose ongoing challenges that could pressure margins.

Analysts appear willing to look through near-term forecast disappointments, focusing instead on the structural growth opportunities presented by T-Mobile’s market share gains and the broader digitalization trends supporting telecommunications infrastructure demand. The revised price targets from JPMorgan and Citi suggest potential upside of 24% and 27% respectively from current levels, indicating that markets may not have fully priced in the company’s earnings power.

The stock’s 15.6% gain year-to-date positions Deutsche Telekom among the stronger performers in the European telecommunications sector, a group that has historically struggled with valuation multiples due to capital intensity and regulatory pressures.

The combination of analyst upgrades, subsidiary strength, and operational scale suggests markets are reassessing the risk-reward profile of Europe’s largest telecommunications company by market capitalization.