Telus Digital wins price target raise at Scotia

With Telus in the mix to take back control of Telus Digital (Telus Digital Stock Quote, Chart, News, Analysts, Financials TSX:TIXT) Scotia Capital analyst Divya Goyal has raised her price target on the latter.

As reported by the Globe and Mail, the analyst June 17th maintained her “Sector Perform” rating on Telus Digital while raising her price target from $3.00 to $3.40.

“we believe TELUS Digital presented robust potential that, over time, was marred by a slew of events, including the overpriced acquisition of Willow Tree, followed by sustained macro weakness, leading to a less-than optimal outcome for a potentially promising business such as TIXT,” Goyal wrote.

On June 12, Telus announced it was seeking to acquire TIXT for (U.S.) $3.40 per share.

“Our proposal to fully acquire Telus Digital reflects our belief that closer operational proximity between Telus and Telus Digital will enable enhanced AI [artificial intelligence] capabilities and SaaS [software-as-a-service] transformation across all lines of our business, including telecommunications, Telus Health and Telus Agriculture & Consumer Goods, driving positive outcomes for the customers we serve,” Telus CEO Darren Entwistle said. “We anticipate that our deep familiarity with Telus Digital will enable us to conclude this proposed transaction, with appropriate engagement from Telus Digital, quickly and efficiently, and, postclosing, effectively integrate the business and the team. Telus Digital will continue to be an important business unit within Telus, underscored by its demonstrated leadership in customer service excellence, digital transformation and heartfelt caring in the communities where team members live, work and serve. Accordingly, we believe the terms of our proposal are compelling for Telus Digital shareholders, and our leadership team looks forward to working constructively with the independent members of Telus Digital’s board of directors to progress the proposed acquisition. Notably, we believe this proposed transaction will yield meaningful benefits for Telus Digital and, importantly, for our customers and investors.”