Deutsche Telekom’s Record Q1 Earnings Fail to Ignite Stock as Technical Headwinds Persist

Deutsche Telekom posts record Q1 profit of €5.8B, raises outlook, yet shares fall 15% YoY. Analysts see upside with €40 targets, but technicals show bearish trend.

The numbers are hard to argue with. Deutsche Telekom posted an operating profit of €5.8 billion in the first quarter — the best in the DAX — and raised its full-year guidance. Yet the shares closed Friday at €27.63, representing a decline of roughly 15% over the past twelve months. The disconnect between fundamental strength and market reception has rarely been starker.

Analysts, for the most part, remain convinced the sell-off is overdone. Goldman Sachs trimmed its price target from €42 to €40 on 14 May but kept a “Buy” rating and the stock on its “Conviction List” of preferred picks. The adjustment, the bank explained, reflects updated estimates and a shift in the timing of future cash-flow valuations rather than any fresh skepticism about the business model. Deutsche Bank’s Robert Grindle sees fair value at €42, citing robust free cash flow outside the US as a key support. JPMorgan sticks with “Overweight” and a €40 target.

The optimism on Wall Street stands in stark contrast to what the charts are saying. Technically, the stock is struggling. It trades 8.38% below its 50-day moving average and 5.52% beneath the 200-day line — a classic sign of a bearish trend. The relative strength index sits at 64.2, indicating no oversold extremes, while 30-day annualized volatility has climbed to 31.65%. Adding to the caution, a bearish candlestick pattern recently flashed on the daily chart, signalling potential selling pressure in the near term.

Management is doing its part to shore up confidence. Between 4 and 8 May, the company repurchased another 1.64 million of its own shares, bringing the total under the current programme to roughly 7.41 million since it began on 2 April. Buybacks can absorb dilution and inject demand, but they do not substitute for operational momentum. That will ultimately hinge on whether the raised targets are backed by real performance in the months ahead.

T?Mobile US remains the dominant engine. The US subsidiary provides much of the group’s growth and underpins the upgraded outlook. Yet CEO Timotheus Höttges recently played down expectations for a rapid full takeover of the American unit, leaving organic expansion, cash-flow generation, and dividend continuity as the primary near-term levers. For the 2025 financial year, the board has proposed a dividend of €1.00 per share, offering a modest yield anchor.

On the profit front, the first-quarter numbers were unequivocally strong. Adjusted net profit rose 6.5% to €2.6 billion, and the group now expects full-year adjusted EBITDA to reach approximately €47.5 billion — a slight upward revision from its previous forecast. This puts Telekom ahead of DAX heavyweights such as Allianz and E.ON in the earnings ranking, underscoring its relative resilience even as the broader German economy stutters.

For now, the stock faces a credibility test. It needs to prove that the recent bounce from its lows is more than a reflex move. The next major checkpoint comes on 6 August 2026, when the second-quarter results are due. Until then, the market will be watching closely to see whether Telekom can defend its recent recovery — or whether the technical headwinds will pull the shares back toward deeper troughs.