BCE Inc.: Attractive AI-Driven Growth Offset by Near-Term FCF Pressure and Limited Upside, Justifying Hold Rating

In a report released today, Aravinda Galappatthige from Canaccord Genuity maintained a Hold rating on BCE, with a price target of C$35.00.

Aravinda Galappatthige has given his Hold rating due to a combination of factors tied to BCE’s evolving risk‑reward profile. He views the new 300 MW data centre and broader AI Fabric strategy as attractive, low‑risk growth initiatives with pre‑sold capacity, strong EBITDA margins, and meaningful upside to long‑term cash flow, especially toward 2028 and beyond.

However, he also notes that the elevated capital expenditures required for these projects will materially suppress free cash flow in 2026 and delay a cleaner FCF profile, even as leverage trends only gradually toward management’s 3.5x target. With the stock already near his unchanged C$35.00 target and the core telecom businesses still facing intense competition and softer visibility on service‑revenue recovery, he concludes that upside is limited at present, warranting a Hold rather than a more constructive rating.

In another report released on March 7, TipRanks – OpenAI also reiterated a Hold rating on the stock with a C$38.00 price target.