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BCE (TSE:BCE)
TSX:BCE
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BCE
(TSX:BCE)
61Neutral
Positive Factors
Cost Savings
The company highlighted its $1B cost savings goal, indicating that rationalization efforts thus far have lowered costs by $500M.
Free Cash Flow
The guidance indicated a better-than-expected free cash flow growth of 11% to 19%, suggesting steep reductions in capital expenditures in Canada.
Negative Factors
Competitive Pressure
BCE still faces a number of headwinds, notably underperforming peers in terms of service trends and sub trends underperformed expectations, particularly broadband.
Dividend Sustainability
There was no clarity on how and when the dividend sustainability question will be addressed.
Internet Subscriber Growth
Internet net additions were below expectations, suggesting potential challenges in subscriber growth.
BCE (BCE) vs. S&P 500 (SPY)
Market Cap
$30.30B
Dividend Yield12.68%
Average Volume (3M)3.50M
Price to Earnings (P/E)183.9
Beta (1Y)0.36
Revenue Growth-1.07%
EPS Growth-92.15%
CountryCA
Employees40,390
SectorCommunication Services
Sector Strength78
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.18
Shares Outstanding921,824,600
10 Day Avg. Volume3,367,516
30 Day Avg. Volume3,497,568
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.22
Price to Cash Flow (P/CF)4.00
P/FCF Ratio5.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$35.66Price Target Upside7.97% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering10
BCE Business Overview & Revenue Model
Company DescriptionBCE Inc. is a Canadian communications company headquartered in Montreal, Quebec. It operates in the telecommunications sector, providing a comprehensive range of services including wireless, wireline, Internet, and television services. BCE is the parent company of Bell Canada, which is one of the largest telecommunications providers in Canada. The company's core products and services cater to both residential and business customers, offering solutions such as mobile plans, broadband Internet, IPTV services, and data hosting services. BCE also has media operations that include television networks, radio stations, and digital media properties.
How the Company Makes MoneyBCE Inc. generates revenue through multiple streams. The primary source of revenue comes from its telecommunications services, which include wireless services such as mobile voice and data plans for consumers and businesses. Wireline services, including local and long-distance telephony, broadband Internet, and IPTV services, also contribute significantly to its income. Another key revenue stream is BCE's media segment, which earns money through advertising sales and subscription fees from its television and radio broadcasting operations. Additionally, BCE benefits from strategic partnerships and agreements that enhance its product offerings and expand its market reach. The company's diverse portfolio and widespread customer base across Canada underpin its financial performance.
BCE Financial Statement Overview
Summary
BCE shows a mixed financial performance with strong cash flow management but faces challenges in revenue and profit growth. The company has a solid equity base but is highly leveraged, which could impact financial stability if not managed carefully. While cash flow remains strong, declining revenues and profitability margins require strategic adjustments to improve future performance.Income Statement
The income statement reflects a mixed performance with declining revenue and net income. The gross profit margin is strong at 68.45% for 2024, but the net profit margin has significantly dropped to 1.41%, indicating profitability challenges. Revenue growth has been negative, with a decline of 1.07% from 2023 to 2024. EBIT margin is not available for 2024, indicating potential operational inefficiencies. However, the EBITDA margin remains healthy at 31.72% in 2024.65
Positive
Balance Sheet
The balance sheet shows a solid equity base but also a high level of debt. The debt-to-equity ratio has increased to 2.24 in 2024, suggesting high leverage, which could pose risks. The return on equity is low at 2.01%, indicating limited returns on shareholder investments. The equity ratio is stable at 23.23%, showing a reasonable equity position against total assets.70
Positive
Cash Flow
Cash flow performance is stable with a focus on positive free cash flow. The free cash flow to net income ratio is strong, reflecting effective cash generation relative to net income. However, free cash flow growth is negative, down 19.55% from 2023 to 2024, which could impact future liquidity. Operating cash flow coverage of net income is robust, indicating good cash earnings quality.72
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 24.41B | 24.67B | 24.17B | 23.45B | 22.88B | Gross Profit |
| 16.70B | 7.42B | 16.53B | 9.89B | 9.61B | EBIT |
| 0.00 | 5.50B | 5.41B | 5.44B | 5.01B | EBITDA |
| 7.74B | 10.27B | 9.82B | 9.72B | 8.77B | Net Income Common Stockholders |
| 344.00M | 2.26B | 2.87B | 2.84B | 2.63B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.97B | 1.77B | 149.00M | 207.00M | 224.00M | Total Assets |
| 73.48B | 71.94B | 69.33B | 66.73B | 60.66B | Total Debt |
| 38.31B | 36.18B | 31.92B | 29.67B | 26.32B | Net Debt |
| 36.74B | 35.41B | 31.77B | 29.47B | 26.10B | Total Liabilities |
| 56.13B | 51.38B | 46.81B | 43.81B | 39.34B | Stockholders Equity |
| 17.07B | 20.23B | 22.18B | 22.61B | 20.99B |
| Cash Flow | Free Cash Flow | |||
| 2.56B | 3.18B | 3.23B | 1.09B | 3.47B | Operating Cash Flow |
| 6.99B | 7.95B | 8.37B | 8.01B | 7.75B | Investing Cash Flow |
| -4.44B | -5.78B | -5.51B | -7.00B | -3.54B | Financing Cash Flow |
| -1.75B | -1.54B | -2.99B | -1.02B | -4.13B |
BCE Technical Analysis
Neutral
33.03
Price Trends
33.09
Negative
33.72
Negative
38.32
Negative
Market Momentum
-0.13
Positive
48.75
Neutral
45.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:BCE, the sentiment is Neutral. The current price of 33.03 is below the 20-day moving average (MA) of 33.48, below the 50-day MA of 33.09, and below the 200-day MA of 38.32, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 48.75 is Neutral, neither overbought nor oversold. The STOCH value of 45.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:BCE.
BCE Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $8.50B | 11.25 | 38.85% | 3.74% | 3.76% | 14.27% | |
77 Outperform | $2.89B | 8.32 | 11.48% | 5.38% | -0.07% | -1.48% | |
77 Outperform | C$66.16B | 18.58 | 18.66% | 1.03% | 11.62% | -8.08% | |
75 Outperform | C$21.38B | 12.03 | 16.66% | 5.35% | 6.71% | 96.70% | |
67 Neutral | $30.95B | 30.63 | 6.26% | 7.95% | 0.67% | 15.00% | |
61 Neutral | $30.30B | 183.94 | 1.80% | 12.68% | -1.07% | -92.15% | |
59 Neutral | $27.87B | 0.90 | -19.24% | 4.15% | 2.11% | -44.59% |
* Communication Services Sector Average
Performance Comparison
TSE:BCE
BCE
33.03
-8.53
-20.52%
TSE:T
Telus
20.64
0.51
2.52%
TSE:CCA
Cogeco Communications
70.18
13.98
24.86%
TSE:QBR.B
Quebecor
36.31
7.77
27.24%
TSE:RCI.B
Rogers Communication
38.43
-14.64
-27.58%
TSE:ATD
Alimentation Couche-Tard Inc
70.97
-3.94
-5.26%
BCE Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -5.31% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted BCE's achievements in cost management, digital media growth, and broadband expansion amidst a challenging competitive environment. However, revenue decline, regulatory challenges, and the impact of competitive pricing on wireless revenue were significant concerns.Highlights
Record EBITDA Margin
BCE's consolidated EBITDA margin increased by 1.2 points to 43.4%, marking the highest annual margin performance in over 30 years.
Digital Media Revenue Growth
Digital revenue grew by 19% year-over-year, increasing its share of total media revenue from 35% in 2023 to 42% in 2024.
Broadband Internet Expansion
The company grew broadband Internet market share, contributing to a 3.3% increase in internet revenue and a 12% increase in households subscribing to mobility and Internet service bundles.
Cost Savings Initiatives
BCE achieved over $200 million in cost savings in 2024 through transformation initiatives and workforce reduction programs.
Strong Business Solutions Growth
Business solutions services revenue saw an 18% increase, reflecting the momentum to advance BCE's position as a tech services leader.
Lowlights
Revenue Decline
Total revenue decreased by 0.8%, impacted by sustained competitive pricing pressures and ongoing declines in legacy services.
Wireless Service Revenue Challenges
Wireless service revenue was down 1.5% due to a highly competitive pricing environment.
Adjusted EPS Decline
Adjusted EPS is projected to decline by 8% to 13% in 2025, attributed to higher interest expense, depreciation, and amortization.
CRTC Regulatory Challenges
BCE reduced its CapEx for 2025 significantly due to regulatory decisions by the CRTC, affecting its fiber build-out plans.
Company Guidance
During the BCE Q4 2024 Results and 2025 Guidance Call, several key metrics and strategic initiatives were discussed. BCE achieved a consolidated EBITDA margin of 43.4% in 2024, marking their highest annual margin performance in over 30 years. Wireless service revenue showed positive growth despite intense market pricing, while internet revenue grew by 3.3%, with a 12% increase in mobility and internet service bundles. Notably, digital revenue rose by 19% year-over-year, now comprising 42% of total media revenue. BCE realized over $200 million in cost savings in 2024 through workforce reductions and transformation initiatives, with CapEx decreasing by $684 million to approximately $3.9 billion. Looking ahead, BCE aims for revenue and EBITDA growth of between -3% to +1% and -2% to +2% respectively in 2025, with a focus on maintaining investment-grade credit ratings and potential divestitures of up to $7 billion in noncore assets.BCE Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
BCE Inc. Reports Strong 2024 Results and Sets 2025 Targets
Positive
Feb 6, 2025
BCE Inc. reported a successful fourth quarter and full-year performance for 2024, achieving its non-revenue and revised revenue targets. The company experienced growth in adjusted EBITDA and net earnings, with significant increases in mobile phone and internet subscriber activations. Despite a decrease in cash flow from operating activities due to higher interest payments and tax installments, BCE maintained its annual dividend and reported growth in digital media revenue, positioning itself strongly for future tech services expansion.
Delistings and Listing ChangesBusiness Operations and Strategy
BCE Announces Preferred Shares Conversion Results
Neutral
Jan 21, 2025
BCE Inc. announced the conversion results of its Series AE and AF Preferred Shares, with a significant number of shares tendered for conversion on a one-for-one basis. Post-conversion, the company will have 11,250,771 Series AF Preferred Shares and 3,339,629 Series AE Preferred Shares outstanding. These shares will continue trading on the Toronto Stock Exchange, with the Series AF offering a fixed dividend rate of 5.496% and the Series AE providing a floating adjustable dividend. This conversion impacts BCE’s financial structure and market positioning, maintaining its strong presence in the preferred shares market.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.