National Bank lowers BCE; adjusts Telecom stock price targets

EATON CENTRE, TORONTO, ONTARIO, CANADA - 2015/05/13: Entrance to Bell Store in the Eaton Centre: Bell Telephone Company remains a modern company providing telecommunications products for more than a hundred years. (Photo by Roberto Machado Noa/LightRocket via Getty Images)

National Bank analyst Adam Shine, telecom analyst, downgraded BCE Inc’s stock recommendation and decreased his 12-month price target. (Photo by Roberto Machado Noa/LightRocket via Getty Images).

National Bank telecom analyst Adam Shine is making a number of changes to his price targets and has downgraded his recommendation on Canada’s biggest telco company.

Shine has decreased his rating on BCE Inc.BCE.TO BCEIn a note to clients, he changed his sector perform target from outperform to sector perform and dropped his 12-month price target to $63.00 per shares.

He pointed out that Bell has seen some tailwinds in the wireless segment and has increased market share for home wireline services due to its ongoing fibre network upgrade.

Shine projects that BCE’s adjusted profit and revenue this year will be slightly lower than 2022. But, the company’s dividend growth is expected to continue.

If Shaw Communications and Freedom Mobile are renegotiated, the wireless competition will intensify.

“We expect the eventual closing of the Shaw and Freedom deals, subject to the Competition Bureau’s appeal(s) and ISED approval, to add to competitive intensity in Ontario, Alberta, and British Columbia,” he said.

Rogers Communications Inc. was the biggest concession.RCI.B.TO RCI() offered to take Shaw’s proposed acquisition to the final hurdle. sell Freedom Mobile to Quebecor. Rogers-Shaw is still in force challenges by regulators.

Despite the uncertainty around the deal, he said he’s factoring in Shaw to his financial forecasts for Rogers as of early 2023.

Shine retained Rogers’ outperform rating and increased his 12-month price target by $78.00 per shares, up from $75.00

Similar to BCE Telus Corp.T.TO TUHe said that he could be subject to increased wireless competition from Freedom Mobile and Shaw sales.

Shine kept his outperform stock rating and lowered his 12-month price goal for Telus shares to $31.00 from $34.00.

He highlighted several achievements and upcoming tailwinds that the company has achieved.

“Telus has enjoyed a premium valuation given its verticalization strategy in Wireline as a point of differentiation and given relatively less competition faced out West,” he said.

“After the successful IPO of Telus International whose valuation has since materially reset, we await future monetization opportunities related to Health and Agriculture.”

He said that the company’s free cash flow will increase after completion of the buildouts to its fibre network, and some cost savings due to its acquisition of a subsidiary. LifeWorks acquisition.

A second risk to the telecom industry is the appointment of Vicky Eatrides as the new chair Canadian Radio-television and Telecommunications Commission

“Look for the new CRTC chair to pursue a more pro-consumer tack than the pro-industry skew of her predecessor,” Shine said.

Michelle Zadikian, a senior reporter at Yahoo Finance Canada, is Michelle Zadikian. Follow her Twitter @m_zadikian.

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