Cogeco wins target raise at Desjardins

With fresh leadership, Desjardins analyst Jerome Dubreuil is liking Cogeco Communications (Cogeco Communications Stock Quote, Chart, News, Analysts, Financials TSX:CCA) a little more.

As reported by The Globe and Mail, the analyst July 15 maintained his “Hold” rating on CCA but raised his price target on the stock from $64.00 to $69.00.

Dubreuil says the landscape remains competitive for Cogeco.

“Following the appointment of new CEO Frédéric Perron, CCA has started to implement strategic tweaks which it expects will lead to more savings, including greater integration between the U.S. and Canadian businesses,” he wrote. “The company appears to be slowing down network deployments in the U.S., which we believe makes sense amid high competition and ahead of BEAD. Price increases and network deployments in Ontario should help the top line, but organic growth will remain difficult to achieve in the future.”

The analyst says the company’s cross borders efforts could be streamlined.

“While there are differences between these markets, we agree that several functions can be merged,” he added. “We expect the ongoing streamlining effort to more than offset competitive pressure, as well as TV and landline disconnections, and enable the company to keep EBITDA growth in positive territory. This forecast is contingent on the company managing to turn around Internet loading in the US (despite uncertainty on competitive intensity from FWA and FTTH), finding profitable growth opportunities after the subsidized Ontario network deployment and having success with customer retention in the wireless ventures.”