Deutsche Telekom more than doubles 2026 buyback sum after earnings beat
Deutsche Telekom Expands Share Buyback Programme Following Strong Earnings
By Emanuele Berro
Buyback Programme Details and Market Reaction
Aug 6 (Reuters) - Deutsche Telekom expanded its 2026 share buyback programme by €3 billion ($3.5 billion) to up to €5 billion on Thursday, sending its shares nearly 7% higher, after its quarterly core earnings beat market expectations.
Additional share repurchases will help address the low valuation of the German telecom group's shares relative to their historical levels and take advantage of recent stock-price volatility, it said in a statement.
Analyst Reactions
Oddo BHF analyst Stéphane Beyazian said the unexpected buyback increase at a time of recent share weakness was "very positive".
The shares were leading gains on Germany's blue-chip DAX index and on track for their best trading day since 2013 as of 1030 GMT.
Financial Performance and Key Metrics
“The combination of a historically low valuation and a solid balance sheet without excessive debt creates an excellent starting point for the stock,” DZ Bank analyst Karsten Oblinger said in a note.
The group's adjusted earnings before interest, taxes, depreciation and amortisation after leases, a key earnings metric for telecom operators, rose to €11.8 billion for the second quarter, exceeding analysts' consensus of €11.7 billion provided on its website.
T-Mobile US and Investment Strategy
T-Mobile US remains Deutsche Telekom's biggest earnings driver, helping fund shareholder returns and investments in fibre networks in Germany and cloud and AI services.
European AI Ambitions and Infrastructure
EUROPEAN AI AMBITIONS
Deutsche Telekom's AI computing facility in Munich is fully utilised and demand for it remains very strong, CEO Tim Hoettges told a press conference. It is in talks with Nvidia over additional graphics processing units, which form the backbone of AI training and processing.
It is seeking to position itself as a key provider of sovereign AI and cloud infrastructure in Europe, as governments and companies increasingly seek locally hosted alternatives to U.S. hyperscalers.
EU AI Gigafactory Tender
Hoettges said the European Commission's €10 billion AI gigafactory tender had become more attractive after its design and award process became clearer. Deutsche Telekom is evaluating its participation, but has not yet reached a final decision, he added.
Additional Information
($1 = 0.8660 euros)
(Reporting by Emanuele Berro in Gdansk, additional reporting by Hakan Ersen in Berlin, editing by Milla Nissi-Prussak)