Analyst Aravinda Galappatthige from Canaccord Genuity maintained a Hold rating on Telus (TU – Research Report) and keeping the price target at C$21.25.
Aravinda Galappatthige has given his Hold rating due to a combination of factors influencing Telus’s financial strategy and market position. One of the primary considerations is Telus’s ongoing efforts to reduce its debt levels, notably through the planned sale of a significant stake in its cellular tower network. This move aligns with Telus’s broader strategy to achieve a net debt to EBITDA ratio of 3x by 2027, signaling a commitment to financial stability.
Additionally, the valuation of Telus’s assets, including its network sharing arrangements and potential partnerships in sectors like health and agriculture, plays a crucial role in this assessment. While Telus’s asset divestiture plan is ambitious, with potential proceeds exceeding its debt reduction needs, the execution and structuring of these sales are critical. Investors are likely to respond positively to these de-risking efforts, yet the current market conditions and Telus’s balance sheet position justify maintaining a Hold rating for now.
In another report released today, Bank of America Securities also maintained a Hold rating on the stock with a C$22.00 price target.
Based on the recent corporate insider activity of 34 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.