Is Rogers stock a buy right now? (July, 2024)

It’s not been a good year for shareholders of Rogers (Rogers Stock Quote, Chart, News, Analysts, Financials TSX:RCI.B) but does that make the stock a buy? Opinions differ.

On the pro side, CIBC analyst Stephanie Price, in a research update to clients July 25, maintained her “Buy” rating and price target of (US) $76.00 on RCI, which closed July 24 at $37.02.

The con side is populated by Canaccord analyst Aravinda Galappatthige. As reported in the Globe and Mail’s “Eye on Equities” column on July 26, the analyst downgraded Rogers from “Buy” to “Hold” while cutting his price target from (C) $59.00 to $57.00. Rogers trades on both the TSX and the NYSE.

“While the stock is inexpensively priced, particularly from a free cash flow perspective, we prefer to take a step back in light of sustained promotional pressure in the market and its impact on service revenue trends,” Galappatthige wrote. “With overall service revenue growth unlikely to get much better than 1 per cent through H2/24, we see the balance sheet leverage of 4.7 times, keeping the risk profile of the stock high, in the near term.” He says Rogers’ wireless business showed a “meaningful” moderation during the quarter. The cable business also remained under pressure. Consolidated service revenue growth was only 0.7 per cent from a year earlier. He adds debt levels will keep the risk profile of the stock high in the near term.”

On July 24, Rogers reported its Q2, 2024 results. The company posted Adjusted EBITDA of $2.33-billion on revenue of $5.09-billion.

“We continued to deliver industry-leading financial results in the second quarter and attract more Canadians than any other carrier,” CEO Tony Staffieri said. “With the backdrop of a growing market and healthy competition, we delivered growth with record Wireless and Cable margins. We are on track to deliver our 2024 plan and I am proud of our team for continuing to out-execute our peers.”