In a report released today, Aravinda Galappatthige from Canaccord Genuity maintained a Buy rating on TELUS International (CDA) (TIXT – Research Report), with a price target of $6.00.
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Aravinda Galappatthige has given his Buy rating due to a combination of factors that highlight the potential value in TELUS International (CDA). One of the key reasons is the offer from TELUS to acquire full ownership of TIXT at a premium price, which suggests confidence in the company’s future prospects. The proposed acquisition price offers a significant premium over recent trading prices, indicating a favorable valuation for shareholders.
Additionally, the strategic move by TELUS to gain complete access to TIXT’s free cash flow is seen as a positive step, enhancing TELUS’s financial position. The fact that TELUS is already a major customer of TIXT, contributing significantly to its revenue, further strengthens the business relationship and potential synergies. Despite the relatively low bid compared to historical prices, the likelihood of competing offers is considered minimal, making the current offer more attractive. Overall, these factors contribute to the Buy recommendation, with a target price reflecting a reasonable valuation based on future earnings expectations.
According to TipRanks, Galappatthige is a 2-star analyst with an average return of 0.0% and a 49.80% success rate. Galappatthige covers the Communication Services sector, focusing on stocks such as VerticalScope Holdings, Rogers Communication, and Telus.