Telus downgraded to Sector Perform from Outperform at Scotiabank (yesterday)

As reported yesterday afternoon, Scotiabank downgraded Telus (TU) to Sector Perform from Outperform with a price target of C$21.50, down from C$23. The firm believes the stock’s setup “remains too clouded by what-if scenarios to offset the continued high and unsustainable dividend distribution model.” Due to ongoing growth pressures on Canadian telecom subscriber growth and pricing, Telus may have to cut its dividend to “placate the market,” the analyst tells investors in a research note. Scotiabank believes the company’s asset sales to reduce leverage, while helpful, do not solve the payout ratio.