Deutsche Telekom’s Two-Front Battle: US Record Profits Collide With German Strike Wave

T-Mobile US beats Q1 estimates and raises guidance, but Deutsche Telekom shares slide amid escalating Ver.di strikes and wage disputes in Germany.

The German telecoms giant is living a tale of two markets. Across the Atlantic, T-Mobile US is firing on all cylinders, smashing earnings estimates and lifting its guidance. At home, however, the mood is turning sour as Ver.di escalates its walkouts, putting the share price under renewed pressure.

T-Mobile US Delivers a Wall Street Surprise

T-Mobile US kicked off 2026 with a bang. Revenue jumped 11% to just over $23 billion, while adjusted operating profit surged to $9.2 billion. Earnings per share of $2.27 comfortably beat analyst forecasts, prompting management to raise its full-year outlook. The US unit now expects to add up to 1.05 million new postpaid customers over the course of the year.

Deutsche Telekom holds just over half of T-Mobile’s equity, a stake valued at roughly €90 billion. That makes the US subsidiary the single most important driver of the parent company’s fortunes. News of the strong quarterly performance sent Deutsche Telekom shares 2% higher on Xetra, closing at €27.32.

Analyst Optimism Remains Intact

Wall Street’s reaction to the T-Mobile numbers was unequivocally positive. Deutsche Bank Research reiterated its buy rating on Deutsche Telekom with a €42 price target. Barclays kept its “Overweight” stance and a €39.50 target. Across 68 analysts, the average price target stands at €40.10 — implying substantial upside from current levels.

Yet the stock has been sliding since the start of the year, when it traded above €34. At €26.76, it sits roughly 22% below that peak and just a whisker above its 52-week low of €26.45. The disconnect between analyst enthusiasm and market reality is stark.

Ver.di Turns Up the Heat

The culprit is a brewing labour conflict that shows no signs of cooling. Ver.di has widened its warning strikes to North Rhine-Westphalia and parts of eastern Germany after the second round of wage talks ended without a concrete offer from management. The union is seizing on Deutsche Telekom’s €2 billion share buyback programme as evidence that the company has room to boost pay.

Between April 20 and 24 alone, the group repurchased nearly 1.58 million shares at an average price of €28.30. Since the programme launched on April 2, it has bought back around 4.44 million shares. The current tranche, worth up to €550 million, is slated for completion by the end of June — part of a broader €2 billion plan running through 2026.

The next round of negotiations is scheduled for May 11 and 12. If management holds its ground, the industrial action is likely to intensify.

A Regulatory Bright Spot

On the regulatory front, there is a glimmer of relief. The Federal Network Agency has announced it will lift ex-ante regulation on Deutsche Telekom in Munich, Cologne, Ingolstadt and Wolfsburg. Agency president Klaus Müller cited sufficient competition in those cities as the rationale. The change means rental prices for line infrastructure will become freely negotiable rather than state-mandated — a move competitors have criticised as premature.

The May 13 Showdown

All eyes are now on May 13, when Deutsche Telekom publishes its first-quarter results. The timing is critical: the report lands just one day after the final scheduled wage negotiation round. Investors will be watching for any signs that the strikes have dented operational performance. A settlement would remove the biggest cloud hanging over the stock; a protracted dispute could keep the pressure on.

The operational fundamentals, at least, remain solid. Adjusted EBITDA rose to €44.2 billion in 2025, and management is targeting around €47.4 billion for 2026. The dividend paid in April came in at €1.00 per share, 11% higher than the previous year. The company is also ploughing €30 billion into German fibre-optic expansion through 2030, with 2.5 million new households expected to be connected this year alone.

For now, the share price is caught between two powerful forces: the earnings engine of T-Mobile US pulling one way, and the strike-driven uncertainty pulling the other. The next fortnight will determine which force wins out.