Deutsche Telekom: A Rating Upgrade, a €17m Buyback, and a US Dividend Gusher – Yet the Stock Keeps Falling

Stock nears 52-week low despite Fitch upgrade, buybacks, and dividend; oversold RSI hints at bounce if €25.71 floor holds amid merger uncertainty.

The T?Mobile merger saga is proving a stubborn drag on Deutsche Telekom’s shares, overshadowing a run of genuinely positive developments. The stock slid 2.1% on Monday to €26.16, perilously close to its 52?week low of €25.71. For a company that just secured a credit rating upgrade, is aggressively buying back its own stock, and stands to collect a hefty US dividend, the market’s mood looks decidedly out of sync.

Fitch lifted the Bonn?based group’s long?term issuer rating to A? with a stable outlook, a clear nod to its financial solidity. Yet the accolade has done little to arrest the share price slide. The monthly decline now approaches 10%, and the gap from February’s year?high has widened to 23%. A technical indicator suggests the selling may have gone too far: the 14?day relative strength index sits at 29.3, firmly in oversold territory. That sets the stage for a potential bounce – provided the €25.71 floor holds.

Management has been active on the buyback front, snapping up nearly 17 million of its own shares since the start of April. The second tranche, worth up to €550 million, is in its final days, with roughly 1.65 million shares acquired on Xetra in a single mid?June session. By cancelling most of the repurchased paper, the group mechanically boosts earnings per share. So far, though, the Börse has given the programme a lukewarm reception.

A more tangible source of cash is flowing from across the Atlantic. T?Mobile US, in which Deutsche Telekom holds a majority stake, is paying a quarterly dividend of $1.02 per share, equating to an annual $4.08 per stub. That payout, due on 10 September 2026, underpins the parent company’s own distribution capacity. For the past financial year, Deutsche Telekom raised its dividend to €1.00 per share – a direct reward for a solid operating performance. First?quarter net revenue climbed organically by nearly 5% to €29.9 billion, while adjusted operating profit rose 7.5%.

Yet the cloud on the horizon is the persistent chatter about a full merger with T?Mobile US. Speculation has rattled investors, who worry about the complexity and potential dilution of a deal. Until that uncertainty is resolved, Deutsche Telekom’s fundamental strength appears to be taking a back seat.

Beyond the merger noise, the company is quietly building new revenue streams. A joint venture with Palo Alto Networks, dubbed “Sovereign Cortex with T Security”, will offer AI?powered cybersecurity with a data?sovereign architecture tailored for European critical?infrastructure operators and financial firms. The service, designed to comply with the EU’s DORA regulation and GDPR, is slated for launch in the third quarter of 2026.

For now, the technical picture and the macro?driven sell?off are trumping the operational story. The RSI hints at exhaustion among sellers, but only a decisive break above recent resistance – and clarity on the US merger front – will convince the market that Deutsche Telekom’s shares are due for a recovery.