Analyst Keith Bachman of BMO Capital maintained a Hold rating on TELUS International (CDA) (TIXT – Research Report), retaining the price target of $3.00.
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Keith Bachman has given his Hold rating due to a combination of factors impacting TELUS International (CDA). The company has received a non-binding offer from its parent company, TELUS, to acquire the remaining shares at $3.40 per share, which suggests a valuation based on a 5–6x EV/EBITDA multiple using FY26 estimates. This offer comes at a time when TELUS International is experiencing weakened growth and margins, alongside undergoing a restructuring process.
Furthermore, the company’s financial performance is under pressure due to a high dependency on its parent company for a significant portion of its revenue, coupled with a challenging IT services demand environment. The lack of near-term catalysts and limited interest from private equity in IT services firms further supports the Hold rating, as the potential for another strategic offer seems unlikely. Both parties are expected to evaluate the current offer and its valuation, but the outlook remains cautious.
Bachman covers the Technology sector, focusing on stocks such as ServiceNow, Adobe, and SAP AG. According to TipRanks, Bachman has an average return of 10.6% and a 57.49% success rate on recommended stocks.
In another report released on June 13, CIBC also maintained a Hold rating on the stock with a $3.40 price target.