Telus, the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst Aravinda Galappatthige from Canaccord Genuity upgraded the rating on the stock to a Buy and gave it a C$21.00 price target.
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Aravinda Galappatthige has given his Buy rating due to a combination of factors including Telus’s recent strategic decisions and financial outlook. The company has experienced a significant stock sell-off, yet it has issued new free cash flow (FCF) objectives through 2028, which suggests a positive long-term growth trajectory. Despite the high dividend yield, which often indicates potential cuts, Telus is expected to maintain its dividend distribution, which is a positive signal for investors.
Furthermore, Telus is actively working on reducing its leverage ratio, with plans to reach a target by the end of 2027. The company is also exploring asset divestitures, including a potential transaction involving Telus Health, which could generate substantial proceeds. These strategic moves, along with the company’s commitment to maintaining its dividend and achieving its FCF targets, underpin the Buy rating. The valuation remains attractive, with the target price set at $21.00 per share, reflecting confidence in Telus’s future performance.
Galappatthige covers the Communication Services sector, focusing on stocks such as BCE, Telus, and Rogers Communication. According to TipRanks, Galappatthige has an average return of -0.5% and a 48.28% success rate on recommended stocks.
In another report released on November 26, TD Cowen also maintained a Buy rating on the stock with a C$26.00 price target.