Telstra Group's (ASX:TLS) underlying return on invested capital is expected to increase 10% by 2030 on operating leverage, said Macquarie Analyst Andrew Gillies, according to a Wednesday The Australian report.
The company recently disclosed its 2030 growth strategy, which aims to achieve positive operating leverage with underlying income growing faster than costs and business-as-usual (BAU) capital expenditure each year to 2030.
Gillies identified multiple cost-reduction opportunities and sustained strength in mobile average revenue per user in the company's recent strategy day.
While acknowledging execution risks in areas like software-defined networking, Gillies sees core strengths in network and connectivity as key drivers of momentum and efficiency for the company.
Macquarie has upgraded Telstra to outperform with a price target of AU$5.28.
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