RCI.B stock upgraded to “Buy” at Desjardins

With the stock looking cheaper and headwinds better understood, one analyst says Rogers Communications (Rogers Stock Quote, Chart, News, Analysts, Financials TSX:RCI.B) is now a buy.

As reported by the Globe and Mail, Desjardins analyst Jerome Dubreuil Friday upped his rating on RCI.B from “Hold” to “Buy”, and raised his twelve-month price target from $66.50 to $69, arguing that the risks facing the stock are now better understood.

“We now better understand many of the risks that kept us on the sidelines,” the analyst said. “1. Increased competition—financials are resilient. RCI has fared well so far during the heightened competitive environment, and QBR appears to be entering English Canada with a non-disruptive approach centred on profitable growth. 2. Regulatory changes—manageable impact. This week’s CRTC decision is probably a net positive for RCI in light of BCE’s reduced FTTH deployment expectations. MVNO agreements in place should improve the position of smaller players, but RCI’s recent wireless execution has been strong. 3. Integration risk—ahead of plan. RCI now expects to achieve its synergy target earlier than anticipated. 4. 3800MHz spectrum auction—still a risk. RCI has the lowest amount of spectrum to buy in large cities before reaching the government cap. Moreover, market reactions to spectrum auction results have historically been relatively muted.”

On November 9, Rogers reported its Q3, 2023 results. The company posted Adjusted EBITDA of $2.41-billion on revenue of $5.09-billion, a topline that was up 36 per cent over the same period last year, before, of course, the acquisition of Shaw.

“We continued to deliver industry-leading results in the third quarter, reflecting seven straight quarters of growth and momentum,” said Tony Staffieri, president and chief executive officer. “Six months into our Shaw integration, we’re tracking ahead of our synergy targets and deleveraging plans. At the same time, we continue to introduce new technology, new innovations and new value propositions to Canadians. The team is firing on all cylinders and executing with discipline, I am very pleased with our progress.”

Shares of Rogers closed November 9 up 1.76 to $57.10