Do experts think the Telstra share price is good value right now?

The Telstra Corporation Ltd (ASX: TLS) share price is an interesting investment proposition in 2022. Do the experts believe it’s an opportunity?

Since the start of the year, the Telstra share price has fallen by 4.5%. Some businesses have fallen much further. For example, the Xero share price has dropped around 30% in this calendar year.

But just because Telstra hasn’t fallen much, doesn’t mean it can’t be good value today.

Brokers are liking the moves that the telco is making to increase the profitability and prospects of the business.

The deal-making telco

One of the things that brokers have liked is the deal between Telstra and TPG Telecom Ltd (ASX: TPG). Morgan Stanley thinks it can help Telstra give customers a cost-effective method of getting access to additional spectrum in regional Australia, which will help speeds. It will also help profit.

TPG will gain access to around 3,700 of Telstra’s mobile network assets. Telstra will also obtain access to and deploy infrastructure on up to 169 existing TPG mobile sites, improving coverage for customers.

Telstra said that the deal would realise more value from Telstra’s network infrastructure for shareholders while making a “very significant” contribution to Telstra’s wholesale mobile revenue.

But this hasn’t been the only deal that Telstra has made in recent history which could impact the Telstra share price.

Last year it announced the acquisition of Digicel Pacific, adding 2.5 million customers and “leading mobile businesses” in PNG, Fiji, Vanuatu, Tonga, Nauru and Samoa. This acquisition generated combined earnings before interest, tax, depreciation and amortisation (EBITDA) of US$233 million for the financial year ended 31 March 2021, with a “strong margin”.

The ASX telco share also entered into a deal to buy GP clinical and practice management software company MedicalDirector for an enterprise value of A$350 million. Its software as a service (SaaS) solutions supports general GPs and other specialists and pharmacies in the Australian healthcare industry. At the time of the acquisition, it supported approximately 23,000 medical practitioners and is used to deliver more than 80 million consultations a year.

Is the Telstra share price a buy today?

Morgan Stanley thinks so, rating it as a buy with a price target of $4.60.

The broker Morgans rates Telstra as a buy, with a price target of $4.56. It acknowledges the underlying growth that Telstra is now generating.

Indeed, Telstra is looking to achieve a compound annual growth rate (CAGR) of high-teens for underlying earnings per share (EPS) to FY25. That marks a change to the last few years where profit has been falling predominately due to the transition of households to the NBN.

Credit Suisse rates Telstra as a buy, with a price target of $4.50.

Ord Minnett also rates the business as a buy, with a price target of $4.50.