Ahead of the company’s third quarter results, Canaccord Genuity analyst Aravinda Galappatthige has maintained his “Buy” rating on Rogers Communications (TSX:RCI.B).
On October 19, before market open, Rogers will report its Q3, 2017 results. Galappatthige thinks Rogers will post Adjusted EPS of $0.97 on revenue of $3.607-billion.
The analyst says he expects more good things from Rogers in the wireless department.
“Given the sustained surge in wireless fundamentals over the past year across the incumbents and Rogers’ own ascendency, we believe a key focus in the quarter will be around maintaining wireless profitability growth,” the analyst says. “We are calling for 5.9% EBITDA growth in Q3/17. We believe this will be achievable due to recent ARPU trends and substantial subscriber loading over the past 15 months where y/y postpaid sub growth accelerated from 1.8% to 4.3%. We are calling for 103.5k postpaid net adds in Q3/17 vs. the high base of 114k last year (Q3/15 was 77k). While the y/y upswing in net adds is likely to plateau, largely due to the size of the base itself, we do expect sustainability of ARPU growth. Thus, we forecast 2.2% ARPU growth in Q3/17 driving 6.6% wireless service growth. This would augur well for wireless EBITDA growth through the rest of the year and early 2018, even with higher COA/COR.”
In a research update to clients today, Galappatthige maintained his “Buy” rating and one-year price target of $69.00 on Rogers Communications.
Galappatthige thinks Rogers will generate Adjusted EBITDA of $5.306-billion in fiscal 2017. He expects that number will improve to EBITDA of $5.52-billion the following year.