Deutsche Telekom’s Labour Deal Set to Remove Key Uncertainty as Stock Tests Lows

Deutsche Telekom shares are hovering dangerously close to their 52-week trough of €25.99, with the stock changing hands at around €26.99 as the market awaits a pivotal union ballot. The ver.di tariff commission is due to vote today on a new collective wage agreement that would provide cost visibility for the Bonn-based telecom giant through to the end of 2028. The outcome is being closely watched by investors, not least because the stock has lost over 11% this year and sits more than 20% below its 52-week high of €34.35.

The proposed contract, which covers roughly 60,000 employees, runs for 33 months and includes a clear schedule of salary increases. Monthly fixed pay will rise by €150 in August 2026 and by a further €140 a year later. In June 2028, the table salaries will be lifted by an additional 2.4%. On an average salary, the total increase amounts to around 8.5%. Crucially, management has ruled out compulsory redundancies for the entire duration of the agreement. A positive vote would remove what analysts have described as a major operational overhang, allowing the board to focus entirely on network expansion and fibre roll-out.

On the operational front, the group has been delivering solid numbers. First-quarter revenue climbed organically to €29.9 billion, while adjusted earnings before interest and tax rose to €11.5 billion. Buoyed by that performance, management raised its full-year outlook – the adjusted operating result for 2026 is now expected to reach €47.5 billion. The labour deal, if ratified, would protect that forecast from any disruptive strike costs in the coming months.

Should investors sell immediately? Or is it worth buying Deutsche Telekom?

Alongside the operational update, Deutsche Telekom has been leaning on its share buyback programme to underpin the stock. The second tranche, worth up to €550 million, is running until the end of June and forms part of a total buyback envelope of €2 billion for the current year. Since the start of April, the company has already repurchased 15.3 million of its own shares, with last week alone seeing 1.6 million shares snapped up. Most of these are slated for cancellation, a move designed to boost earnings per share. Yet, despite the steady buying, the stock has been unable to arrest its decline. The 50-day moving average at €28.32 has been decisively broken to the downside, and the relative strength index has slid to 34.6, flirting with oversold territory.

The combination of cost certainty from a potential labour peace, sustained cash returns via buybacks, and a robust operational base presents a mixed picture for the equity. The next major catalyst will be the second-quarter earnings release on 6 August. For now, all eyes are on the union vote, which stands to eliminate one of the final near-term uncertainties hanging over the shares.