Should I buy Telefónica stock in 2025? Essential insights for NZ investors

What is Telefónica?

How much is the Telefónica stock?

The price of Telefónica stock is rising this week. As of now, TEF is trading at $5.28 USD, up 0.96% over the past 24 hours and showing a 1.54% gain for the week.

Telefónica’s market capitalisation stands at $29.94 billion, with an average three-month daily volume of 789,211 shares.

Its latest P/E ratio is not meaningful due to negative earnings, but the forward P/E is 18.62, and investors benefit from a robust 6.08% dividend yield.

With a stock beta of 0.55, Telefónica shares have generally been less volatile than the broader market, making them a relatively steady option for NZ investors seeking income.

Our complete analysis of the Telefónica stock

After a deep analysis of Telefónica’s latest financial results and a thorough review of its stock over the past three years, our view combines quantitative metrics, technical and market data, and competitive benchmarking, all integrated through proprietary algorithms. Telefónica—which trades on both the Madrid and NYSE exchanges—stands at a pivotal moment in global telecom, driven by accelerating momentum and a strategic reset. Why, then, could Telefónica stock once again become a strategic entry point into the sector for 2025?

Recent Performance and Market Context

Telefónica’s stock price has shown outstanding resilience in 2025, closing at $5.28 USD (€4.67 EUR)—its 52-week high—after a +16.56% rally in six months and +31.34% year-to-date. Such price appreciation underscores renewed investor confidence, backed by robust trading volumes (789,211 shares on average over the last three months) and a low beta of 0.55, highlighting its defensive profile in volatile markets.

Recent positive catalysts include major asset sales—like the $1.25 billion sale of the Argentine unit and the $440 million Uruguay deal—freeing up capital and sharpening Telefónica’s focus on high-value markets. The appointment of Marc Murtra as Executive Chairman and a strategic review with Boston Consulting Group also signal a major governance reset, targeting cost optimization, future growth, and innovation.

At the macro level, the European telecommunications sector benefits from steady demand for connectivity, ongoing digitalization, 5G expansion, and a supportive policy environment for infrastructure players. Telefónica’s established presence in Europe and Latin America uniquely positions it to capture these tailwinds—making it particularly attractive for New Zealand investors seeking diversification and recurring income in a defensively valued space.

Technical Analysis

Technically, Telefónica’s stock signals a strong, maturing bullish trend. The move above the $5.28 resistance (now a 52-week high), along with moving averages (the 20-day at $4.78 and the 50-day above the current price), show strong technical support with minimal overextension.

• RSI (14-day) at 58.33: Solidly neutral-to-bullish, with room for further upward movement before overbought territory.
• MACD (0.06–0.08): Clear buy signal, showing positive momentum and convergence above the zero line.
• Support levels: The €4.30–4.36 range in Madrid and $4.96 USD provide important buffers—recent dips have seen prompt buying interest.
• Bullish pivot: The stock’s +20.14% rally from its April 2025 pivot low underscores persistent bullish sentiment with minimal volatility spikes.

Current momentum—backed by technical buy signals and supportive moving averages—implies Telefónica could be entering a robust rally phase. For strategic investors, the recent highs look more like confirmation of a genuine turnaround than a short-term peak.

Fundamental Analysis

Telefónica’s investment case rests on revenue growth, generous shareholder returns, and a disciplined pivot toward efficiency and innovation. While Q1 2025 saw a 26% YoY net income drop (largely from non-recurring items and normalization after the pandemic), organic revenue rose by +1.3%, and EBITDA grew by +0.6%, outperforming several peers.

EBITDA margin expansion (+0.7ppt YoY) shows successful cost optimization, while free cash flow—usually negative in Q1—is expected to normalize through the year.

• Valuation: Trading at just 0.64x price/sales and 1.33x price/book, Telefónica is attractively valued versus peers worldwide, especially given its asset base and diverse cash flows.
• Dividend yield: At a strong 6.08%, Telefónica pays above both sector and European market averages—appealing for income-focused investors, including those from NZ seeking global telecom exposure.
• Strategic simplification: Focused strategy on core markets (Spain, UK, Germany, Brazil) and digital transformation, shown by 6.6% YoY growth in Telefónica Tech (cloud, cybersecurity, IoT).
• Brand strength and scale: Telefónica’s leadership in Europe and Latin America creates high barriers to entry, boosting pricing power and long-term contract stability.

While its high historical debt (debt/equity: 192.2%) deserves monitoring, ongoing asset disposals and streamlining support credible deleveraging over the next 12–24 months, potentially reducing risk and unlocking valuation upside.

Volume and Liquidity

Telefónica’s major strength is its liquidity and global float (3.64 billion shares floating out of 5.67 billion outstanding). Consistently strong NYSE volume—close to 800,000 shares daily—enables easy entry and exit, lower spread costs for institutional investors, and ensures that price action reflects institutional conviction versus retail noise.

Solid volume at these price levels further affirms market confidence. Along with a reliable dividend and low beta, Telefónica’s liquidity supports ongoing valuation adjustments while keeping its defensive profile—a distinct advantage in uncertain markets.

Catalysts and Positive Outlook

Several key catalysts could accelerate Telefónica’s investment case through 2025 and beyond:

• Strategic review outcomes: Ongoing work with Boston Consulting Group targets a leaner model—with ~€285 million in annual cost savings and improved capital allocation.
• Portfolio divestments: Recent asset sales (Argentina, Uruguay; potential Mexico deal) are driving debt lower and funding 5G and digital expansions in core markets.
• 5G leadership: Heavy investment in high-return network infrastructure, opening up B2B, IoT, and cloud opportunities.
• Digital transformation: Rapid Telefónica Tech (cloud, data, security) growth is outpacing legacy business, positioning the group for long-term relevance with enterprise and government customers.
• Sectoral and regulatory support: In Europe, pro-infrastructure policies, spectrum allocation clarity, and digital sovereignty support benefit incumbents.
• Dividend continuity: Management reiterated plans to maintain the dividend, offering solid income in a low-yield world.

Combined with potential further simplification, Telefónica has real scope to deliver steady income and capital appreciation—especially as macro sentiment improves and investors pivot toward undervalued defensives.

Investment Strategies

Given its technical and fundamental profile, Telefónica offers attractive entry points for a variety of investor horizons:

• Short-term: Recent dips into the $4.96–$5.01 range offer tactical entries, with momentum suggesting a possible breakout above the current high if bullish catalysts emerge (e.g. asset sales, positive strategic updates).
• Medium-term: Investors expecting further upside from strategic review results, balance sheet improvements, and upcoming dividends may use any consolidation as an opportunity to build exposure.
• Long-term: For those targeting a blue-chip European telco with steady income, Telefónica’s brand, asset portfolio, and transformation roadmap add to its total return potential—especially at this technical inflection, ahead of structural catalysts and ongoing sector rerating.

For NZ investors building portfolios, Telefónica enables diversification by geography, sector, and currency, while also aligning with long-term digital infrastructure trends and recurring revenue streams.

Is it the Right Time to Buy Telefónica?

To sum up, Telefónica presents an appealing blend of bullish technicals, robust dividend yield, attractive valuation, and a transformative strategy under new leadership. Progress is defined by focused portfolio management, digital innovation, and relentless commitment to shareholder value—even as debt reduction and FX risk top the agenda.

Trading at 52-week highs, supported by volume and momentum, Telefónica’s fundamentals justify renewed attention—while forward catalysts point to further upside as the company executes on strategic milestones. For NZ investors targeting income and resilient technology leaders globally, Telefónica offers an excellent opportunity as it advances through this transition.

Ultimately, the combination of strong dividends, undervalued assets, and visible growth drivers signals Telefónica could be entering a new bullish stage. As global telecom restructuring accelerates, this European incumbent provides both stability and upside—an attractive mix for investors seeking global opportunities.

How to buy Telefónica stock in NZ?

Buying Telefónica shares online from New Zealand is a straightforward and secure process when using regulated brokers. You can either buy Telefónica shares directly (spot/cash purchase), becoming a shareholder, or trade CFDs (Contracts for Difference) to speculate on price moves without owning the underlying shares. Both approaches are available to NZ retail investors on well-established trading platforms, each with its own features and fee structures. To help you make the most informed choice, you’ll find a broker comparison further down the page.

Spot Buying (Cash Purchase)

A cash purchase means acquiring real Telefónica shares, either on the NYSE (in USD, ticker: TEF) or the Madrid Stock Exchange (in EUR). This approach gives you legal ownership of the shares, access to any dividends, and voting rights. In New Zealand, most brokers charge a fixed commission per order, often between NZ$5 and NZ$15, depending on the platform and exchange.

Example

If the Telefónica share price is USD $5.28 and the NZD/USD exchange rate is 0.60, $1,000 NZD will convert to approximately $600 USD. Deducting a typical brokerage fee of $5 NZD, you can invest roughly $595 USD, allowing you to buy around 112 shares ($595 ÷ $5.28 ≈ 112).

Gain scenario: If Telefónica’s share price rises by 10% (to $5.81), your 112 shares are worth $651 USD (112 × $5.81), equivalent to about $1,085 NZD at the same FX rate.

Result: Gross gain of $100 NZD (10%), plus you may receive dividends as a shareholder.

Trading via CFDs

CFD trading lets you speculate on Telefónica share price movements without owning the actual shares. CFDs are leveraged products, commonly available with regulated brokers. This means you can open a position with a smaller deposit (margin) and multiply your market exposure. Key fees to consider include the spread (the difference between buy and sell price) and overnight financing if you hold positions longer than a day.

Example

You open a CFD position on Telefónica with $1,000 NZD and 5× leverage. This gives you market exposure equivalent to $5,000 NZD. If the stock rises by 8%, your position increases in value by 40% (8% × 5), resulting in a gross gain of $400 NZD before fees. Remember, leverage also increases your risk of loss.

Final Advice

Before investing, always compare broker fees, supported markets, and account conditions—especially for global shares like Telefónica. The choice between spot buying and CFD trading depends on your objectives and risk tolerance: long-term investors may prefer ownership and dividends, while active traders may appreciate the flexibility of CFDs. For more information and to find platforms suited to New Zealand investors, please see the broker comparison further down the page.

Our 7 tips for buying Telefónica stock

The latest news about Telefónica

Telefónica shares have reached a new 52-week high, underscoring strong technical momentum and renewed investor interest. As of May 30, 2025, Telefónica’s stock price on the NYSE stands at $5.28 USD, capping a significant rally of more than 18% over the past year and 31% year-to-date. Technical indicators point to sustained bullish momentum: the stock’s RSI remains in neutral territory, the MACD continues to signal upward trend persistence, and key moving averages show solid support. This continuous uptrend, reinforced by a ‘Buy’ rating from momentum and MACD signals since April, is particularly relevant to New Zealand investors seeking international diversification and yield, given the global hunt for stable, income-generating equities.

The company maintains an attractive dividend yield of 6.08%, providing robust income potential for NZ-based income-oriented portfolios. Telefónica’s dividend, paired with its steady annual payout, ranks highly among global telecom peers, which is further underscored by current cash flow and payout policies. For New Zealand investors, dividend distributions are subject to Spanish withholding tax but may benefit from double tax treaties, making Telefónica a competitive candidate for those seeking to supplement local income-oriented strategies with international exposure, despite the absence of direct operational footprint in New Zealand.

Telefónica is actively simplifying its portfolio and reducing debt, having completed strategic sales of Latin American assets including Uruguay and Argentina this month. In recent days, the company finalized the divestiture of its Uruguayan operation to Millicom for $440 million, as well as its Argentine division for $1.25 billion, while steps are underway to potentially exit the Mexican market. These actions are materially strengthening Telefónica’s balance sheet, reducing emerging market risk, and sharpening focus on core markets like Spain, Brazil, the UK, and Germany. For systematic or institutional investors in New Zealand, these moves lessen earnings volatility and help mitigate the macroeconomic and FX risk commonly associated with Latin American telecom exposure.

The group’s Q1 2025 financial results show organic revenue and EBITDA growth, with margin expansion in European and Brazilian operations. Telefónica reported organic revenue growth of 1.3% in Q1 and EBITDA up 0.6%, despite a drop in net income driven largely by seasonal and non-core factors. Notably, the core Spanish unit and Brazilian subsidiary delivered improving margins and robust customer additions, while Telefónica Tech posted a 6.6% revenue rise. Against a backdrop of challenging European market conditions, this consistent operational performance reinforces the company’s investment case among New Zealand portfolios seeking global telecommunications stability and resilience.

Telefónica’s strategic review under new executive leadership points to a continued focus on 5G, digital services, and cost optimization, providing constructive long-term growth signals. Since the appointment of Marc Murtra as Executive Chairman and the ongoing strategic review in partnership with Boston Consulting Group, Telefónica has signaled commitment to further network investment, digital services expansion, and annual cost reductions. These initiatives are anticipated to support organic revenue and EBITDA growth in 2025, while lowering leverage and improving capital efficiency. For New Zealand-based investors monitoring international exposure, these measures are crucial for longer-term growth prospects and may contribute to upward pressure on valuations, despite temporary analyst caution due to ongoing corporate restructuring.

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P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.