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Rogers will miss Guy Laurence but not that much, says Echelon

Guy Laurence
Guy Laurence
Rogers Communications President and CEO Guy Laurence

Rogers Communications (Rogers Communications Stock Quote, Chart, News: TSX:RCI.B) is losing a great leader, but his replacement combined with the company’s current momentum means the telco shouldn’t miss a beat, says Echelon Wealth Partners analyst Rob Goff.

Yesterday, in a surprise move, Rogers Communications announced that president and CEO Guy Laurence would step down, effective immediately. The company said Laurence will be replaced with former Telus CEO Joe Natale, but that in the interim chairman Alan Horn would take over.

“We have appreciated Guy’s leadership over the last three years,” said Rogers’ deputy chairman Edward Rogers. “He has moved the company forward re-establishing growth, introducing innovative programs like Roam Like Home, while getting the company ready for its next phase of growth. On behalf of the Rogers family and the board, I’d like to thank Guy for his competitive spirit and many contributions.”

Goff says if there was ever a good time to lose a great exec like Laurence, this might have been it, especially considering his replacement.

“The announcement that Guy Laurence would be stepping down came as a surprise to investors and analysts. Fortunately, Rogers made the announcement following a strong Q316 showing and perhaps more importantly with a strong replacement identified – former TELUS CEO Joe Natale – once he becomes available. Guy Laurence was clearly recognized as a positive agent of change as Rogers has delivered on many positive internal restructuring moves, strengthened the company’s customer value proposition (reduced churn), and furthered the development of a significantly stronger product roadmap. Arguably, these successes supported the move to secure a proven Canadian CEO as the quarterback to lead the next phase in rebuilding growth. Laurence’s interim replacement, Alan Horn (Chairman of the Board), commands exceptional internal and external respect for his ability to carry on the growth and improvements Rogers has undertaken in the past few quarters. Looking ahead, Joe Natale will bring a wealth of market experience and a similar focus on the customer experience when he takes over the reins on a longer term basis. “

In a research update to clients today, Goff maintained his “Buy” rating and one-year price target of $60.00 on Rogers Communications, implying a return of 14.2 per cent at the time of publication.

Goff believes that Rogers will generate Adjusted EBITDA of $5.11-billion on revenue of $13.78-billion in fiscal 2016. He expects these numbers will rise to EBITDA of $5.15-billion on a topline of $14.04-billion the following year.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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