Telus Stock: Hold Rating Amidst Sector Underperformance and Challenging Wireless Segment

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

Aravinda Galappatthige has given his Hold rating due to a combination of factors impacting Telus’s performance and outlook. Despite expectations of a solid quarter with a 3.5% increase in adjusted EBITDA and a slight rise in adjusted EPS, the company’s stock has underperformed its peers, declining by 4% over the past three months. This underperformance is partly due to the lack of significant catalysts that have benefited other companies in the sector.
Galappatthige notes that while Telus Health is showing strong growth, with a 25.9% increase in EBITDA, the wireless segment remains challenging, with service revenue growth still in negative territory. Additionally, the wireline segment, although stable, is experiencing some pressure. The analyst believes that significant improvements in Telus’s high-growth areas and a broader recovery in wireless fundamentals are not expected until late 2026. Given these factors and the current valuations, which are ahead of the group, the Hold rating is maintained.