Baillieu's Thursday Thematic pick is Telstra

Baillieu's Thursday Thematic pick is Telstra. We maintain TLS as a Quant BUY with an upgraded $6.40 Quant Target Price (QTP). TLS is a diversified telecommunication/media company with exposure to data super cycle (i.e. the growing mobile and online structural change in many sectors such as retail, media, entertainment, education, communication, technology and health). The ever changing NBN continues to deliver more positives while TLS has managed to reduce costs and improve customer service with competitors struggling to match it. Target price was set with the view that TLS deserves to trade at three standard deviation premium (i.e. 19.5 PE) due to its structural leverage to evolving economy, high fully franked yield and potential to upgrade growth outlook. Full research on page 25: (VIEW LINK)