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Telus Corp. (TSE:T)
TSX:T
Top Page
Telus
(TSX:T)
67Neutral
Positive Factors
Asset divestiture
TELUS' divestiture plan includes asset sales proceeds that could amount to over $1B, showing proactive measures to strengthen financial health.
Financial discipline
TELUS is serious about achieving its de-leveraging target of 3x net debt/LTM EBITDA, providing evidence of financial discipline and focus on balance sheet strength.
Negative Factors
Leverage concerns
TELUS faces several challenges, including unsustainable leverage and a dividend greater than its free cash flow.
Market challenges
The nearly 2-year long sell off in Canadian telecom stocks indicates past challenges that could impact market sentiment.
Telus (T) vs. S&P 500 (SPY)
Market Cap
$30.11B
Dividend Yield8.05%
Average Volume (3M)4.57M
Price to Earnings (P/E)29.6
Beta (1Y)0.46
Revenue Growth0.67%
EPS Growth15.00%
CountryCA
Employees106,400
SectorCommunication Services
Sector Strength78
IndustryTelecommunications
Share Statistics
EPS (TTM)0.67
Shares Outstanding1,514,000,000
10 Day Avg. Volume5,360,066
30 Day Avg. Volume4,571,377
Financial Highlights & Ratios
PEG Ratio1.97
Price to Book (P/B)N/A
Price to Sales (P/S)1.49
Price to Cash Flow (P/CF)7.00
P/FCF Ratio6.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$22.62Price Target Upside11.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Telus Business Overview & Revenue Model
Company DescriptionTelus Corporation is a Canadian national telecommunications company that provides a wide range of telecommunications services and products, including wireless, data, Internet protocol (IP), voice, television, entertainment, and video products. The company operates in several sectors, including wireless and wireline communications, offering services to both consumer and business markets across Canada. Telus is known for its focus on technology innovation and customer service excellence.
How the Company Makes MoneyTelus makes money primarily through its wireless and wireline segments. The wireless segment generates revenue by providing mobile services, including voice, data, and text, to residential and business customers. Telus offers various postpaid and prepaid plans, generating consistent revenue from subscribers. The wireline segment includes revenue from Internet, television, and home phone services. Telus also earns money through its business solutions, providing IT and cloud-based services to enterprises. Additionally, Telus Health is a growing revenue stream, offering digital health solutions and services. Significant partnerships with technology companies and investments in infrastructure, such as 5G network development, contribute to Telus's earnings.
Telus Financial Statement Overview
Summary
Telus demonstrates a solid financial position with consistent revenue growth and strong cash flow generation. Despite an increase in leverage, the company maintains effective cost management, resulting in stable gross profit margins. The improvements in free cash flow and cash conversion efficiency further strengthen its financial health. The company should continue to monitor its debt levels to mitigate potential risks.Income Statement
Telus has demonstrated a consistent growth trajectory in revenue, increasing from CAD 14,589 million in 2019 to CAD 20,139 million in 2024. The gross profit margin remained strong at approximately 62% in 2024, indicating effective cost management. The net profit margin has improved from 5.8% in 2023 to 4.9% in 2024, which shows a positive trend in profitability. However, the EBIT margin has shown some volatility, decreasing from 16.3% in 2019 to 13.9% in 2023, before recovering slightly to 13.9% in 2024.80
Positive
Balance Sheet
The company maintains a solid equity base with stockholders' equity at CAD 15,620 million in 2024, although it has slightly decreased from CAD 16,112 million in 2023. The debt-to-equity ratio has increased from 1.70 in 2019 to 1.91 in 2024, indicating higher leverage, which could pose risks if not managed carefully. However, the equity ratio remains stable at around 27%.75
Positive
Cash Flow
Telus shows strong cash flow generation, with operating cash flow increasing from CAD 3,927 million in 2019 to CAD 4,847 million in 2024. The free cash flow has also improved significantly from negative CAD 928 million in 2021 to CAD 1,460 million in 2024. The operating cash flow to net income ratio is robust, indicating good cash conversion efficiency.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 20.14B | 20.00B | 18.29B | 16.84B | 15.34B | Gross Profit |
| 12.50B | 12.47B | 11.19B | 10.14B | 9.07B | EBIT |
| 2.80B | 2.36B | 2.95B | 3.07B | 2.48B | EBITDA |
| 6.68B | 6.31B | 6.94B | 5.90B | 5.63B | Net Income Common Stockholders |
| 993.00M | 841.00M | 1.61B | 1.66B | 1.21B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 869.00M | 864.00M | 974.00M | 723.00M | 848.00M | Total Assets |
| 58.02B | 56.14B | 54.05B | 47.99B | 43.33B | Total Debt |
| 29.78B | 27.45B | 25.14B | 20.97B | 20.39B | Net Debt |
| 29.78B | 26.59B | 24.17B | 20.24B | 19.54B | Total Liabilities |
| 41.23B | 38.83B | 36.39B | 31.93B | 30.73B | Stockholders Equity |
| 15.62B | 16.11B | 16.57B | 15.12B | 12.07B |
| Cash Flow | Free Cash Flow | |||
| 1.46B | 1.29B | 1.16B | -928.00M | 1.75B | Operating Cash Flow |
| 4.85B | 4.50B | 4.81B | 4.39B | 4.57B | Investing Cash Flow |
| -3.70B | -4.75B | -5.41B | -5.47B | -6.17B | Financing Cash Flow |
| -1.14B | 139.00M | 848.00M | 953.00M | 1.90B |
Telus Technical Analysis
Negative
20.20
Price Trends
20.98
Negative
20.69
Negative
20.85
Negative
Market Momentum
-0.29
Positive
36.67
Neutral
12.42
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:T, the sentiment is Negative. The current price of 20.2 is below the 20-day moving average (MA) of 21.45, below the 50-day MA of 20.98, and below the 200-day MA of 20.85, indicating a bearish trend. The MACD of -0.29 indicates Positive momentum. The RSI at 36.67 is Neutral, neither overbought nor oversold. The STOCH value of 12.42 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:T.
Telus 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 | $8.36B | 11.08 | 38.85% | 3.79% | 3.76% | 14.27% | |
71 Outperform | C$587.05M | 6.40 | 10.29% | 5.83% | -0.16% | 133.49% | |
67 Neutral | $30.11B | 29.61 | 6.26% | 8.05% | 0.67% | 15.00% | |
62 Neutral | C$30.54B | 180.97 | 1.80% | 12.86% | -1.07% | -92.15% | |
59 Neutral | $29.14B | 0.91 | -18.74% | 4.05% | 2.07% | -49.65% |
* Communication Services Sector Average
Performance Comparison
TSE:T
Telus
20.43
0.22
1.10%
TSE:BCE
BCE
33.13
-8.55
-20.52%
TSE:QBR.B
Quebecor
36.02
7.51
26.35%
TSE:CGO
Cogeco Inc. SV
62.12
8.76
16.42%
Telus Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -1.45% | Next Earnings Date: May 2, 2025
Earnings Call Sentiment Neutral
TELUS demonstrated strong customer growth and robust EBITDA performance, highlighting significant achievements in its Health and Agriculture segments. However, challenges such as a decline in mobile ARPU and higher financing costs tempered the overall positive sentiment. The company remains focused on leveraging its strong asset base for future growth.Highlights
Record Customer Additions
TELUS achieved over 1.2 million telecom net new customer additions in 2024, marking the third consecutive year of surpassing 1 million additions.
Strong EBITDA Growth
TTech EBITDA grew by 7% in Q4 2024 and 5.5% for the full year, meeting the target range set at the beginning of the year.
TELUS Health and Agriculture Growth
TELUS Health achieved 10% revenue growth and 20% EBITDA growth in Q4, while TELUS Agriculture & Consumer Goods saw a 16% revenue increase.
Improved Capital Efficiency
Consolidated capital intensity was down 200 basis points year-over-year at 12%, reflecting a planned slowdown in fiber and wireless asset builds.
Lowlights
Decline in Mobile Phone ARPU
Mobile phone ARPU declined by 3.6% in Q4 2024, indicating ongoing competitive pressures in the market.
Higher Financing Costs
Net income was partially offset by higher financing costs, reflecting increased long-term debt and higher interest rates.
Slight Miss on Free Cash Flow Target
Free cash flow for the full year was approximately $2 billion, slightly below the target of $2.1 billion due to higher-than-expected cash impacts of contract assets and device financing.
Company Guidance
During TELUS' 2024 Q4 earnings call, the guidance for 2025 highlighted several key financial metrics and strategic focuses. TELUS aims for TTech operating revenue growth of 2% to 4% and adjusted EBITDA growth of 3% to 5%, supported by moderated capital expenditures of approximately $2.5 billion. The company expects consolidated free cash flow to reach around $2.15 billion. TELUS plans to leverage its strong performance in customer additions, having achieved over 1.2 million net new telecom customer additions in 2024. The company also targets a net debt-to-EBITDA ratio of approximately 3x by 2027, alongside the removal of the discounted dividend reinvestment plan. The strategic focus includes enhancing operational excellence, expanding customer base, and capitalizing on growth in TELUS Health and Agriculture sectors. These initiatives aim to underpin long-term profitable growth and sustain the dividend growth program, which is now in its 15th year.Telus Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
TELUS Considers Strategic Sale of Wireless Tower Stake to Boost Financial Flexibility
Positive
Mar 27, 2025
TELUS is exploring the sale of a minority stake in its wireless tower infrastructure to enhance network operations and strengthen its balance sheet. This move aims to provide financial flexibility, allowing TELUS to pay down debt and achieve a leverage target by 2027, while maintaining its commitment to sustainable growth and stakeholder value.
DividendsBusiness Operations and StrategyFinancial Disclosures
Telus Achieves Strong Growth in Q4 2024, Sets Positive 2025 Targets
Positive
Feb 13, 2025
Telus reported strong operational and financial results for the fourth quarter of 2024, with a notable increase in customer growth and financial metrics. The company added 328,000 mobile and fixed customers in the quarter, driven by demand for their bundled services. They observed a 4.1% rise in TTech operating revenues and a 7.0% growth in adjusted EBITDA, attributed to efficiency improvements and real estate and copper monetization. For the full year, Telus saw a consistent rise in revenues and free cash flow, targeting further growth in 2025 to strengthen their balance sheet and continue their dividend growth program.
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.