Deutsche Telekom at a Crossroads: Record Profit Meets Labour Showdown as Stock Languishes

Despite €5.8B quarterly EBIT topping DAX, Deutsche Telekom shares fall 15% annually; wage talks with Ver.di over 6.6% pay rise intensify ahead of May 26-27 negotiations.

Germany's telecommunications giant finds itself in an unusual position: leading the DAX in profits while wrestling with a deepening labour conflict and a stock that refuses to reflect its operational strength. The disconnect between Deutsche Telekom’s strong quarterly performance and its struggling share price is becoming harder to ignore as the next round of wage talks approaches.

Profit Machine, Struggling Chart

According to EY’s latest ranking, Deutsche Telekom posted an EBIT of €5.8 billion in the first quarter of 2026, placing it firmly at the top of Germany’s blue-chip index. The nearest competitor, Allianz, recorded €4.5 billion, while Eon came in at €3.9 billion. The performance stands out in a quarter where DAX revenues fell by an average of 3.7%, even as aggregate earnings climbed 4.4%.

Much of that profit firepower comes from abroad. More than 80% of revenues for Germany’s biggest companies now originate in international markets, and Deutsche Telekom is a textbook example—its global footprint, particularly through T-Mobile US, provides the leverage that the domestic market alone cannot.

Yet the share price tells a different story. On Friday, the stock closed at €27.63, down 0.58% on the day. Over the past twelve months, the decline has reached 15.17%. The weekly gain of 0.80% offers little comfort when the shares trade below both the 50-day moving average of €30.16 and the 200-day line of €29.24. Technical analysts note that a “hanging man” candlestick pattern formed on May 13, a cautionary signal that can sometimes foreshadow profit-taking after a rally.

Wage Talks Enter Critical Phase

The next big catalyst for the stock is the collective bargaining round scheduled for May 26–27 in Potsdam. The third round of negotiations ended without a deal, with management presenting a structural offer that the Ver.di union dismissed as inadequate. Ver.di is demanding a 6.6% pay increase for roughly 60,000 employees, a short contract duration, and an annual membership bonus of €660.

Pressure is mounting. Since late April, more than 20,000 workers have taken part in warning strikes. The latest demonstration in Potsdam drew around 2,500 participants. Crucially, Ver.di has expanded the conflict by calling on staff from the private customer sales division, Services Europe, and T-Systems to join solidarity actions. That broadening of the strike front raises the stakes for the upcoming talks.

The labour unrest comes at a delicate time for operational priorities. Deutsche Telekom is pushing its fibre-optic rollout while struggling to convert that network investment into paying customers. The take-up rate stands at 17.1%, only 1.6 percentage points higher than a year earlier. The company plans to add 750,000 new FTTH customers this year, targeting one million in 2027. An additional €800 million has been earmarked for the next expansion phase, bringing the total fibre budget to €30 billion by 2030. Any prolonged dispute could disrupt both customer service and deployment timelines.

Buybacks Continue Amid Uncertainty

Ver.di has pointed to Deutsche Telekom’s planned €2 billion share buyback programme for 2026 as evidence that the company can afford higher wages. The company confirms the programme is running on schedule. Meanwhile, management recently raised its full-year guidance, now expecting adjusted EBITDA AL of around €47.5 billion and free cash flow AL above €19.8 billion for 2026. Those numbers give the union a tangible argument at the negotiating table, but they have done little to revive investor sentiment.

What’s Next for the Stock

In the short term, the €27 level serves as a practical test of support. If it holds, the spotlight could swing back to the strong EBIT figures and the broader earnings momentum. If it breaks, the hanging-man signal could gain credibility, regardless of the solid quarterly results.

Inflation data from Germany and the United States may provide the next external push. Rising yield expectations often weigh on defensive names like Deutsche Telekom, even when their underlying business is performing well.

The wage round on May 26–27 will be the immediate focus, though. A settlement would relieve pressure on operations and remove a significant overhang from the stock. A failure to reach a deal could see Ver.di escalate industrial action, dragging the conflict into the summer. The next quarterly results are due on August 6, but by then the labour situation may already have set the tone for the second half of the year.