RBC chops price target on BCE

Wait and see.

That’s the advice from RBC Dominion Securities analyst Drew McReynolds on BCE (BCE Stock Quote, Chart, News, Analysts, Financials TSX:BCE), ahead of the company’s Q1 financials, due May 8.

As reported by the Globe and Mail, McReynolds April 9 maintained his “Sector Perform” rating on BCE while cutting his price target on the stock from $39.00 to $37.00. The analyst says visibility has become an issue with the stock, particularly when it comes to the status of its dividend.

“We look for more timely entry points with the closing of the MLSE and Ziply transactions (H2/25), an associated uptick in revenue and EBITDA growth, and/or greater progress in tracking toward targeted dividend payout and leverage ratios (including additional non-core asset sales and/or infrastructure crystallizations) being potential catalysts for the stock,” the analyst wrote. “While the current dividend yield is compelling, until these potential catalysts emerge and until there is more clarity from the Board on the company’s current dividend policy, we see the stock as largely rangebound compounded by a relatively high cost of equity following the pullback in the shares alongside the newly instituted DRIP.”

At press time, shares of BCE were down 0.6% to $29.58.