The 9% year-to-date pullback in shares of’s , and its current valuation, represent “an attractive and timely entry point,” said RBC analyst Drew McReynolds in upgrading shares of the Canadian telecom this morning.
His rating was bumped up to “outperform” from “sector perform” though his price target is unchanged at C$72. Roger’s stock decline this year is more than the 5% decline for the Canadian telecom group overall, and compares with a 9% rise in the S&P/TSX Composite Index. From a valuation standpoint, Rogers has a blended EV/EBITDA multiple of 7.7x versus 8.2x for BCE and 8.5x for TELUS, he said.
In a note to clients, the RBC analyst provided a list of reasons for the upgrade: “ Closer proximity to realizing the bulk of the >$1B in Shaw operating cost synergies through H1/25 driving an attractive +11% adjusted EBITDA CAGR ; what is likely to be a steady de-risking of the stock as visibility on Shaw integration synergies increases, the competitive landscape post-Rogers-Shaw-Quebecor transactions finds a new equilibrium, leverage declines and management’s track record of improved execution lengthens; option value on non-core and/ or non-telecom asset sales/crystallizations; what we believe are recalibrated expectations for wireless Average Revenue Per User , a tougher cable environment for Internet and television...