BUZZ - Australian telecom stocks fall to a 15-month low; Citi says Telstra's earnings upside offsets negative impact from SpaceX

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October 12 - ** Telecom stocks .AXTJ fell as much as 2.4%, hitting their lowest point since July 2024. Among them, heavyweight stocks Telstra TLS.AX, Superloop SLC.AX, and Aussie Broadband ABB.AX led the declines.

** Citi stated that the TLS rating remains “Buy” due to the upside potential of FY2027 profit guidance, which offsets market concerns regarding SpaceX SPCX.O’s acquisition (link) of its U.S. low-band spectrum license portfolio.

** The broker reported that in September, the flagship brand performed stronger, with MyTelstra app downloads increasing 10% month-on-month and the year-on-year decline narrowing.

** Citi noted there is a 0.67 “reasonable correlation” coefficient between app downloads and Telstra’s postpaid and individual user net additions.

** Additionally, challenger broadband provider SLC’s subscriber growth outlook is above market consensus, and the report regards the recent share price weakness as a good buying opportunity.

** Citi maintains a "Neutral" rating for ABB, although first-quarter app downloads increased 37% year-on-year, suggesting that residential broadband growth may exceed expectations.

** So far this year, AXTJ is down 13.6%, a steeper drop than TLS’s 4.4% and SLC’s 5%, but outperforming ABB’s 18.7% decline.

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