TELUS: Buy Rating Underscored by TELUS Health Monetization, Deleveraging Focus, and Attractive Risk/Reward Profile

Canaccord Genuity analyst Aravinda Galappatthige maintained a Buy rating on Telus today and set a price target of C$21.00.

Aravinda Galappatthige has given his Buy rating due to a combination of factors that highlight both near-term catalysts and longer-term value creation for TELUS. He views the formal launch of a strategic monetization process for TELUS Health as a key step that can unlock significant value from this fast-growing asset, especially given its global scale and strong financial performance. Based on his estimates and management’s indicated valuation range for TELUS Health, even a partial stake sale could generate substantial proceeds, strengthening the balance sheet and supporting the company’s deleveraging objectives. He also interprets recent insider and share repurchases at discounted prices as a strong signal of management’s confidence in the company’s underlying worth and disciplined approach to capital deployment.
In his view, the central equity story is now firmly anchored on balance sheet improvement, with TELUS targeting a meaningful reduction in its leverage ratios over the next two years through a combination of TELUS Health monetization, free cash flow growth, and additional portfolio actions. He underpins his valuation with a sum-of-the-parts framework that applies differentiated multiples to TELUS’s core telecom, health, and international businesses, resulting in an implied value that supports a positive stance on the stock. Given the attractive dividend yield, the potential balance sheet upside from strategic transactions, and the conviction reflected by insider buying, Galappatthige believes the risk/reward profile remains favourable and thus maintains a Buy recommendation on TELUS.

In another report released on December 30, National Bank also maintained a Buy rating on the stock with a C$21.00 price target.

Based on the recent corporate insider activity of 61 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of TU in relation to earlier this year.