PETALING JAYA: Telekom Malaysia Bhd
’s (TM) revenue momentum remains intact, but rising operating costs, particularly manpower optimisation and network expenses, are expected to cap earnings expansion for the financial year 2026 (FY26).
BIMB Research said capital expenditure will increase to 18% to 20% of revenue (versus 16.1% in FY25), underpinning investments in data centres, subsea cables and 5G backhaul.
The research house retained its “hold” call on the stock with an unchanged target price of RM7.78 a share.
Meanwhile, several research houses have revised downwards their target price on TM as well as their earnings forecasts on rising cost.
“Given the weaker-than-expected FY25 financial performance, we revised lower FY26 and FY27 earnings estimates by 5.4% and 4.7% respectively as we fine-tune our cost assumptions,” said MBSB Research.
“Following our earnings adjustment, our discounted cashflow derived target price has been revised slightly lower to RM7.12 from RM7.21 a share previously, while we maintain our valuation parameters.”
UOB Kay Hian Research trimmed its 2026 to 2027 earnings estimates by 3% to 10%, on the back of elevated staff costs from anticipated employee separation exercises and RM127mil impairment from the 5G wholesale termination with Digital Nasional Bhd.
TA Research has also cut its forecasts for FY26 and FY27 by 5.9% and 2.7%, respectively, after factoring in lower revenue growth.
It introduced the FY28 earnings forecast of RM1,903mil, representing an earnings growth of 2.4%.
