Telus keeps “Buy” rating at CIBC

Following its plan to sell of some wireless towers, CIBC analysts Stephanie Price has maintained her “Buy” rating on Telus (Telus Stock Quote, Chartm, News, Analysts, Financials TSX:T).

On March 26, Telus announced that it had engaged an advisor to explore selling a minority stake in some of it wireless towers.

“This initiative would provide Telus the financial flexibility to pay down debt and, importantly, accelerate progress on our recently announced path to de-leveraging, including achieving a leverage target ratio of three times net-debt-to-EBITDA [earnings before interest, taxes, depreciation and amortization] by 2027, while concurrently turning off our discounted dividend reinvestment program over the same period,” CFO Doug French said. “This represents a distinct opportunity to create significant value for our stakeholders, including our customers, investors, communities and Canadians coast-to-coast-to-coast. Importantly, this represents only one of many monetization opportunities we are actively considering as part of our de-leveraging playbook which will support continued leading operational and financial performance, and our ability to deliver innovative and superior solutions to our customers.”

Price thinks the towers could fetch a pretty penny.

“On Wednesday, CIBC analyst Stephanie Price said in a report the towers could be worth between $1-billion and $3-billion, an estimate based on data from regulators and previous deal valuations,” The Globe and Mail’s Andrew Willis and Irene Galea wrote.