Quebecor (QBR.B) AI Stock Analysis

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Quebecor

(TSX:QBR.B)

Rating:78Outperform

Price Target:

C$43.00

▲( 13.64% Upside)

Quebecor's overall score reflects strong financial health and effective management, particularly in its Telecom segment, which helps offset the challenges faced in the Media segment. The stock's valuation and technical indicators suggest moderate growth potential, making it an attractive investment for those seeking stability and income.

Positive Factors

Dividend

The dividend was raised 7.7% to $1.40.

Financial Performance

QBR trades at an 11% FCF yield, which combined with a de-levering balance sheet and proven defensive credentials, represents a compelling opportunity.

Market Position

The growing strength of Freedom, with notable market share gains and a clearer path towards a sizable market position nationally, strengthens QBR’s investment thesis as a reliable defensive play with an element of growth.

Negative Factors

Cable Telecom Revenues

Cable telecom service revenues fell 3.7% year-over-year in Q1/25 with internet posting a revenue decline of 2.5%, which is seen as a result of sustained pricing battles in the province of Quebec.

Internet Performance

Internet products underperformed, with a net subscriber loss impacting overall revenues negatively.

Media Profitability

Media division reported much lower profitability with adjusted EBITDA coming in significantly lower than estimates.

Quebecor (QBR.B) vs. iShares MSCI Canada ETF (EWC)

Market Cap

$8.72B

Dividend Yield3.48%

Average Volume (3M)737.01K

Price to Earnings (P/E)11.5

Beta (1Y)0.40

Revenue Growth-1.11%

EPS Growth8.17%

CountryCA

Employees10,000

SectorCommunication Services

Sector Strength89

IndustryTelecommunications Services

Share Statistics

EPS (TTM)0.80

Shares Outstanding154,676,300

10 Day Avg. Volume1,015,671

30 Day Avg. Volume737,006

Financial Highlights & Ratios

PEG Ratio5.25

Price to Book (P/B)3.93

Price to Sales (P/S)0.00

P/FCF Ratio9.54

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$40.65

Price Target Upside7.42% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

Quebecor Business Overview & Revenue Model

Company DescriptionQuebecor Inc. is a leading Canadian telecommunications and media company, primarily operating in the province of Quebec. The company is structured into various sectors, notably telecommunications, media, and sports and entertainment. Its core services include wireless and wireline telecommunication services, television broadcasting, publishing, and distribution of media content. Quebecor is recognized for its flagship brand, Videotron, a prominent provider of internet, cable television, and mobile services.

How the Company Makes MoneyQuebecor generates revenue through several key streams. Its telecommunications sector, led by Videotron, is a primary source of income, deriving revenue from subscription-based services such as internet, television, and mobile phone plans. The media sector contributes through advertising revenue, subscriptions, and content distribution, leveraging its television channels and publishing assets. Additionally, the sports and entertainment division adds to its earnings through event hosting and related activities. Strategic partnerships and investments also play a role in enhancing Quebecor's financial performance, alongside its focus on expanding its telecommunications infrastructure and media offerings.

Quebecor Financial Statement Overview

Summary

Quebecor demonstrates strong financial performance with solid profitability, efficient cash flow management, and commendable returns on equity. While leverage is high, it is typical for the industry and manageable. The company's financial standing supports sustained stability and growth.

Income Statement

Very Positive

Quebecor exhibits robust profitability with a consistent gross profit margin around 55% and a net profit margin near 14% for TTM. The company demonstrates stable revenue growth with a TTM revenue growth rate of approximately 3.4%. EBIT and EBITDA margins remain strong at 25.5% and 41.5%, respectively, reflecting effective cost management and operational efficiency.

Balance Sheet

Positive

Quebecor maintains a high debt-to-equity ratio of approximately 3.6, indicating significant leverage but manageable given the industry norms. The ROE is commendable at 34.5%, showcasing effective use of shareholders' equity to generate profits. The equity ratio stands at 17.1%, suggesting a lower proportion of assets financed by equity, which could be a risk if not monitored carefully.

Cash Flow

Very Positive

The company displays strong cash flow metrics with an operating cash flow to net income ratio of 2.29, indicating healthy cash generation relative to profits. The free cash flow to net income ratio is also solid at 1.17, highlighting efficient capital expenditure management. The free cash flow growth rate is a positive 9.1% TTM, reflecting improving cash generation capabilities.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
5.62B	5.64B	5.43B	4.53B	4.55B	4.32B
	Gross Profit
3.12B	3.12B	2.99B	2.63B	2.66B	2.59B
	EBIT
1.44B	1.42B	1.33B	1.16B	1.19B	1.15B
	EBITDA
2.33B	2.35B	2.18B	1.89B	1.89B	1.92B
	Net Income Common Stockholders
765.00M	747.50M	650.50M	599.70M	578.40M	607.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
214.20M	61.80M	11.10M	6.60M	64.70M	136.70M
	Total Assets
12.96B	13.00B	12.74B	10.63B	10.76B	9.86B
	Total Debt
7.97B	8.00B	8.17B	6.83B	6.86B	6.10B
	Net Debt
7.76B	7.94B	8.16B	6.82B	6.79B	5.96B
	Total Liabilities
10.65B	10.73B	10.90B	9.14B	9.38B	8.65B
	Stockholders Equity
2.22B	2.16B	1.73B	1.36B	1.26B	1.11B
Cash Flow		Free Cash Flow
895.50M	820.60M	898.90M	653.10M	-265.40M	778.40M
	Operating Cash Flow
1.75B	1.72B	1.46B	1.26B	1.18B	1.43B
	Investing Cash Flow
-881.30M	-921.90M	-2.68B	-631.30M	-1.54B	-713.90M
	Financing Cash Flow
-665.30M	-712.20M	1.18B	-812.60M	281.90M	-602.00M

Quebecor Technical Analysis

Technical Analysis Sentiment

Positive

Last Price37.84

Price Trends

50DMA

36.30

Positive

100DMA

34.12

Positive

200DMA

33.38

Positive

Market Momentum

MACD

0.45

Positive

RSI

62.53

Neutral

STOCH

57.59

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:QBR.B, the sentiment is Positive. The current price of 37.84 is above the 20-day moving average (MA) of 37.25, above the 50-day MA of 36.30, and above the 200-day MA of 33.38, indicating a bullish trend. The MACD of 0.45 indicates Positive momentum. The RSI at 62.53 is Neutral, neither overbought nor oversold. The STOCH value of 57.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:QBR.B.

Quebecor Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QBR.B	78 Outperform	$8.72B	11.49	37.69%	3.48%	-1.11%	8.17%
CCA	74 Outperform	$2.88B	8.75	10.84%	5.22%	0.21%	-6.81%
RCI.B	74 Outperform	$19.72B	10.90	16.65%	5.51%	1.50%	193.09%
T	68 Neutral	$33.52B	27.97	7.51%	7.05%	1.73%	54.01%
CGO	66 Neutral	C$625.24M	7.16	10.38%	5.58%	0.06%	115.11%
BCE	63 Neutral	$27.22B	69.88	2.83%	13.32%	-1.23%	-78.01%
Sector *	61 Neutral	$14.08B	5.95	-4.18%	3.68%	2.79%	-36.29%

* Communication Services Sector Average

Performance Comparison

TSE:QBR.B

Quebecor

37.84

9.67

34.30%

TSE:T

Telus

22.14

1.40

6.76%

TSE:BCE

BCE

29.40

-12.11

-29.18%

TSE:CCA

Cogeco Communications

68.62

17.07

33.11%

TSE:RCI.B

Rogers Communication

36.74

-14.89

-28.84%

TSE:CGO

Cogeco Inc. SV

63.98

15.71

32.55%

Quebecor Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 1.06%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Neutral

Quebecor demonstrated strong financial management and operational performance, particularly in the Telecom segment, with increased cash flow and reduced debt. However, the Media segment faced significant challenges, and overall revenue decreased slightly. The sentiment is balanced by these opposing trends.

Q1-2025 Updates

Positive Updates

Increased Cash Flow and EBITDA

Quebecor increased its cash flow from operating activities by $31 million or 8% to $420 million and its EBITDA, excluding stock-based compensation, by $13 million or 2% to $569 million.

Debt Reduction

Quebecor reduced its debt by $155 million, improving its net debt-to-EBITDA ratio to 3.26 times, the lowest leverage in the Canadian industry.

Strong Telecom Segment Performance

The Telecom segment showed significant growth with 54,000 net new lines and improved adjusted EBITDA margins from 48.8% to 50.1%.

Customer Experience and Recognition

Videotron was ranked the most respected telecommunication company in Quebec for the 19th time since 2006 and maintained a low volume of complaints despite industry trends.

Negative Updates

Decline in Media Segment

TVA Group reported a negative EBITDA of $20 million in Q1 2025, primarily due to a decline in advertising revenues and fewer major productions.

Overall Revenue Decrease

Quebecor recorded revenues of $1.3 billion, a decrease of 1% from last year, with a corresponding EBITDA decrease of 2%.

Declining Mobile ARPU

Mobile ARPU continued to decrease, with a $1.63 decrease in Q1 2025, reflecting ongoing challenges in pricing strategies.

Company Guidance

In the first quarter of 2025, Quebecor Inc. reported robust financial and operational results, demonstrating continued growth and strategic execution. The company increased its cash flow from operating activities by $31 million, or 8%, reaching $420 million, while EBITDA, excluding stock-based compensation, rose by $13 million, or 2%, to $569 million. The adjusted income from operating activities also saw a substantial boost, climbing 14% to $185 million. Furthermore, Quebecor reduced its debt by $155 million, leading to an improved net debt-to-EBITDA ratio of 3.26 times, the lowest in the Canadian industry. The company invested over $146 million in capital expenditures to enhance its network and support growth initiatives. In the Telecom segment, net new lines increased by 54,000, with adjusted EBITDA margins improving from 48.8% to 50.1%. Despite a $1.63 decrease in ARPU, Quebecor continues to optimize brand positioning and expand its 5G+ network. The company's Media segment faced challenges with a negative EBITDA of $20 million, attributed to declining advertising revenues. Quebecor remains focused on managing costs and advocating for regulatory changes to level the playing field for Canadian broadcasters.

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.