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Telus Hold Rating: Strategic Uncertainty and Market Challenges Limit Upside

Telus Hold Rating: Strategic Uncertainty and Market Challenges Limit Upside

In a report released yesterday, Matthew Griffiths from Bank of America Securities reiterated a Hold rating on Telus (TUResearch Report), with a price target of C$22.00.

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Matthew Griffiths has given his Hold rating due to a combination of factors related to Telus’s current market position and strategic options. The company is exploring various strategies to reduce its leverage, such as selling stakes in Telus Health and its wireless towers, divesting real estate, and selling off assets from Telus Ventures. However, the timing of these actions remains uncertain, which adds a layer of unpredictability to the company’s financial outlook.
Griffiths also notes that while Telus is trading at a premium compared to its Canadian telecom peers, this is justified by its growth prospects and credible de-leveraging plan. Despite this, the current market challenges, particularly in telecom pricing and volume, limit the potential for further stock price appreciation. As a result, the stock’s current valuation already reflects its near-term outlook, leading to the Hold recommendation.

In another report released yesterday, National Bank also maintained a Hold rating on the stock with a C$23.00 price target.

Based on the recent corporate insider activity of 42 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of TU in relation to earlier this year.

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