Deutsche Telekom Hit by T-Mobile Takeover Jitters Despite Rating Boost and Buyback

Shares hit fresh low on CEO's plan to absorb T-Mobile US minority stake, sparking debt and dilution fears despite Fitch upgrade and strong cash flow guidance.

Tim Höttges’ ambition to fully absorb T-Mobile US is spooking investors, sending Deutsche Telekom shares to a fresh 52-week low on Monday. The telecom giant’s stock touched €25.71 in intraday trading, its deepest point of the year, before closing at €26.15. Rumours that the CEO plans to acquire the remaining minority stake in the US unit, reported by the Wall Street Journal, have reignited fears over debt and equity dilution. With T?Mobile US already accounting for roughly two?thirds of group revenue, the market is now pricing in the risk of a costly integration at a time when European margins remain under scrutiny.

Technical indicators point to extreme bearishness. The Relative Strength Index has dived to 29.2, firmly in oversold territory, yet the stock shows no sign of stabilising. The next major chart support is seen at €22.40, nearly 14% below Monday’s close. Over the past 30 days alone the shares have shed more than 11%, dragging the year?to?date loss to around 16% and widening the gap to February’s high to nearly 24%.

The sell?off flies in the face of a flurry of fundamental positives. Fitch raised Deutsche Telekom’s long?term default rating to ‘A?’ on Monday, citing the robust cash flows from T?Mobile US, and assigned a stable outlook. Management has lifted its guidance for 2026 adjusted operating profit to roughly €47.5 billion. Since the start of April the company has bought back nearly 17 million of its own shares in an effort to stem the decline, and it forecasts cumulative free cash flow of around €15 billion through 2027.

T?Mobile US itself continues to throw off reliable returns. In September it will pay a quarterly dividend of $1.02 per share, directly benefiting the German parent as majority owner and underpinning its own dividend capacity. Broker consensus still sees a median target price near €38, implying potential upside of more than 40% from current levels. At 13.3 times expected earnings for the coming year, the valuation is well below its long?term average, suggesting that the market is heavily discounting the very cash?flow strength that the rating agencies are now praising.