Categories: All postsAnalysts

Cogeco could be sold off down the road, Canaccord Genuity says

The appointment of a new CEO likely means that Cogeco Communications (Cogeco Communications Stock Quote, Chart, News: TSX:CCA) won’t be sold in the short term, but that possibility could eventually come into play says Canaccord Genuity analyst Aravinda Galappatthige.

This morning, Cogeco announced that Philippe Jette had been appointed as its new CEO. Jette joined the company in 2011 as Senior Vice President and Chief Technology and Strategy Officer.

“Philippe Jette has strong experience in the commercialization of communications services,” the company commented in a press release this morning. “Under his unifying leadership style, he conveys his vision and passion for the Company and fully endorses Cogeco’s values. An announcement regarding his replacement as President of Cogeco Peer 1 will be made in the coming weeks.”

Galappatthige says this move could cool speculation around the company’s future, but perhaps only for a time.

It has long been speculated that CCA could be a takeout candidate for Rogers Communications, given RCI’s ~33% (combined direct and indirect holdings) equity stake in CCA,” the analyst says. “However, in recent years speculation had subsided following CCA’s U.S. M&A expansion activities and Audet’s consistent comments on retaining ownership/control. With this management change, which will for the first time see non-family management assume the lead operational roles of CCA, we believe market speculation on the divestiture of CCA’s Canadian cable operations to RCI could reignite. While we do not see a near-term sale of the company, it is possible over the longer term We do not believe that a sale of the business is imminent because today’s press release emphasized that the Audet family intends to continue to develop the company “as it has done for the last 60 years”, very consistent with prior messages. Having said that, we see a compelling case that it could be sold over the longer term,”

In a flash research update to clients today, Galappatthige maintained his “Hold” rating and one-year price target of $73.00 on Cogeco.

We Hate Paywalls Too!

At Cantech Letter we prize independent journalism like you do. And we don't care for paywalls and popups and all that noise That's why we need your support. If you value getting your daily information from the experts, won't you help us? No donation is too small.

Make a one-time or recurring donation

Nick Waddell

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.

Recent Posts

Is Peloton Stock a Buy? (May, 2024)

Following news of a restructuring, Roth MKM analyst George Kelly has chopped his price target on Peloton (Peloton Stock Quote,… [Read More]

3 days ago

Is Ascend Wellness stock a buy?

Ahead of the company's first quarter results, Beacon analyst Russell Stanley thinks Ascend Wellness (Ascend Wellness Stock Quote, Chart, News,… [Read More]

3 days ago

Paradigm chops price target on Snipp Interactive

Following the company's fourth quarter results, Paradigm Capital analyst Daniel Rosenberg has cut his price target on Snipp Interactive (Snipp… [Read More]

3 days ago

It’s time to buy cannabis stocks, this analyst says

A major development came down the pipe this week at the U.S. Drug Enforcement Agency has reportedly decided to reschedule… [Read More]

3 days ago

Is Generac stock a buy?

Following the company's first quarter results, Roth MKM analyst Chip Moore remains neutral on Generac Holdings (Generac Holdings Stock Quote,… [Read More]

4 days ago

Bombardier is a buy, Desjardins says (May, 2024)

The stock has climbed slowly but surely since last October. But is there still money to be made on Bombardier?… [Read More]

4 days ago