$TM (4863.MY)$ has received a mixed recommendation from research houses after recording a 13% decrease in net profit for its third quarter of 2024 (3Q24) to RM465 million compared to RM538 million recorded in 3Q23.

Both RHB Investment Bank Bhd (RHB Research) and Maybank Investment Bank Bhd (Maybank IB) have a BUY call on TM while MIDF Amanah Investment Bank Bhd (MIDF Research) gave the telecommunication company a NEUTRAL rating. All the research houses have set a target price of between RM7.50 to RM8.45 for TM.

Albeit the lower net profit, RHB Research remains optimistic about TM's future, projecting an 11.7% compound annual growth rate for FY24F-F26F, driven by healthy growth in data and Internet revenues, coupled with ongoing cost management. The research house also expressed confidence in TM's role as a key player in Malaysia's data centre boom, driven by its investments in connectivity and data centre solutions.

Maybank IB, meanwhile, acknowledged that TM's long-term prospects remain strong, especially as the company continues to benefit from Malaysia's data centre expansion despite a decline in earnings year-on-year.

All the research houses agreed that TM's fundamental position is solid, backed by its dominance in fixed-line telecommunications and continued growth in broadband and internet services.

While the near-term outlook may face challenges from rising costs and competitive intensity in the broadband segment, the company's strong market position and strategic initiatives in the digital infrastructure space support its long-term growth trajectory.