TPG Telecom (ASX:TPG) is well-positioned to convert value-end subscriber growth into earnings despite intensifying industry competition for value-end mobile share, Jarden said in a June 2 note.
Given the telecommunications company's "positioning as the value brand, smallest back-book and lowest cost operator, we believe it can deliver structurally better earnings conversion on value-end industry growth," the investment firm said.
TPG confirmed its fiscal year 2026 guidance while committing to a medium-term framework to deliver operating leverage. Jarden believes the share price response to the trading update, where the stock fell more than 7%, was overdone as there was no change to the forecast.
The company's digital subscription expansion and capital expenditure reduction following the completion of a post-transformation investment cycle give it clear levers to improve free cash flow from fiscal year 2026 through fiscal year 2030, the equity research firm said.
Jarden maintained an overweight rating on TPG with a target price of AU$4.30.