Is BCE a buy? (October, 2024)

Desjardins Securities analyst Jerome Dubreuil is a little less confident about the prospects for BCE these days (BCE Stock Quote, Chart, News, Analysts, Financials TSX:BCE).

On September 18, BCE announced that it had agreed to sell its stake in Maple Leaf Sports and Entertainment to Rogers Communications for $4.7-billion.

“We are proud of our time as co-owners of these iconic sports teams, and through this agreement have ensured that fans can count on Bell’s continued support of their teams, CEO Mirko Bibic said. “Today’s announcement demonstrates that we are focused on creating the financial flexibility to support our ongoing transformation and core growth drivers.”

The analyst says this deal was actually a good one for BCE, but it leaves the future a little murky.

“We believe the Maple Leaf Sports & Entertainment (MLSE) transaction, wherein BCE sold its stake in the entertainment company to RCI, was a positive for the name; however, we believe BCE’s growth prospects remain too low for it to trade at a premium to RCI,” he wrote. “Recent comments by BCE lead us to believe that there will be limited change to the top-line trajectory as a result of its transition ‘from telco to techco’. On the bright side, recent interest rate cuts, coupled with our expectation that the dividend will not be cut in the foreseeable future, should protect the downside.”

As reported by the Globe and Mail, the analyst maintained his “Hold” rating but cut his price target on the stock from $53.00 to $51.00.