Better sentiment towards an increasingly competitive cable offering should help stabilize Rogers Communications’ (TSX:RCI.B) third quarter results, says Euro Pacific Canada analyst Rob Goff.
In a research update to clients Wednesday, Goff maintained his “Buy” rating on Rogers Communications, but raised his one-year target price from $50.00 to $52.00, implying a return of 12.6% at the time of publication.
On Thursday, October 22, Rogers will report its Q3, 2015 results. Goff says his expectations are essentially in line with the street consensus. He is looking for year-over-year EBITDA growth of 0.8%, which is below Q2’s growth of 1.8%, but ahead of Q1’s decline of 3.2%. The analyst expects Rogers will post earnings of $0.75 with EBITDA of $1.32-billion on revenue of $3.31-billion.
Goff characterized the themes he thinks will dominate the quarter.
“The wireless focus is likely on retention and churn issues looking beyond double cohorts while the wired/cable focus will likely be on the new product development prospects on IPTV and 1G broadband,” he said. “We raise our target price by $2 as we continue to believe sentiment towards cable should improve modestly as the relative strength of their product offering improves.”