Why you should buy Deutsche Telekom

Eric Galiegue

(Photo credits: Adobe Stock - )

(Photo credits: Adobe Stock – )

The sector of telecommunications operators seems particularly attractive to us on the stock market, and more particularly Deutsche Telekom.

Basic feeling: favorable

The forward-looking EPS anticipated by the consensus of analysts, materialized by the blue curve in the graph below, has been progressing steadily since 2015, and its outlook is favorable. However, overall, the price has not followed these positive developments, since, despite the recent rebound, it is currently not very different from the average observed in 2015-2016.

Source: Factset and Valquant Expertyse

Source: Factset and Valquant Expertyse

For the future, the growth anticipated by analysts is accelerating year after year, from 2022 to 2024… It has also been revised upwards in recent months, which reinforces the favorable fundamental sentiment

Source: Factset and Valquant Expertyse

Source: Factset and Valquant Expertyse

Analysts have understood this well, and have raised the target price they assign to the share sharply throughout 2021. The resulting potential is currently 33%, the highest in the last 10 years.

Source: Factset and Valquant Expertyse

Source: Factset and Valquant Expertyse

Digital sentiment: favorable

Based on digital data provided by our partner SESAMm, we have observed a strong improvement in digital sentiment. In particular, the proportion of blogs with a positive connotation has risen sharply, as shown in the following graph…

Source: SESAMm and Valquant Expertyse

Source: SESAMm and Valquant Expertyse

As total digital activity has increased sharply, the improvement in digital sentiment is validated. In this context of favorable digital reputation, a rise in prices is more likely.

source: SESAMm and Valquant Expertyse

source: SESAMm and Valquant Expertyse

Favorable walking feeling

Finally, we consider the market sentiment to be supportive, as the stock price is above its moving averages.

Source: Factset and Valquant Expertyse

Source: Factset and Valquant Expertyse

The current market context favors sectors considered to be defensive, ie whose activity depends little on the economic situation, which is the case of telecommunications network operators. In addition, we are currently witnessing possible “big maneuvers” within the main telecommunications groups. The concentration of players has become necessary, which could favor an operator like Deutsche Telekom in Germany, but also Orange in France and KPN in the Netherlands. We are supportive of the sector in general, and on the stock side, we specifically recommend Deutsche Telekom.



Methodology of this monthly column

We consider that a share lives three lives. A fundamental life, a digital life and a market life.


The fundamental life corresponds to the developments of the company in the real sphere.

It is measured by the usual financial and accounting metrics: turnover, results and balance sheet ratios which show whether the company is in good financial health. We continuously monitor fundamental sentiment, which is carried by financial analysts and includes earnings forecasts and financial data for equities in general.


Market life corresponds to stock price developments.

Classically, this stock market life is characterized according to the trend followed: bullish or bearish, depending on the evolution of share prices and transaction volumes. We constantly monitor market sentiment, which is carried by investors, and resumes simple trend following indicators.


The digital life of the company corresponds to its digital reputation,

that can be continuously measured by interpreting content on the web. Thus, in discussions, on forums or on news sites, the name of the company is mentioned, and the associated content is positively or negatively connoted. We continuously monitor digital sentiment using alternative data provided by our partner SESAMm (volume of activity and digital sentiment for each stock).

Digital reputation: a new stock-picking indicator.

Valquant Expertyse is an independent economic and financial analysis and research firm.

SESAMm is one of the leading companies in Big Data and Artificial Intelligence solutions applied to asset management.

Swiss Life Gestion Privée is an asset manager that practices non-index conviction management

A partnership between these three companies allows Valquant Expertyse to advise the ESG Valeuroselect fund (ISIN: FR0010734046), managed by Swiss Life Private Management. The fund management process uses digital indicators updated by SESAMm, and contextualized by Valquant Expertyse. It is an “integrated analysis” methodology that is implemented by the management team of Swiss Life Private Wealth.

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Why you should buy Deutsche Telekom


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