Rogers Communications named a “Best Idea” at TD Cowen

In its Canada Best Ideas 2025 report, TD Cowen analyst Vince Valentini reiterated his “Buy” rating on Rogers Communications (Rogers Communications Stock Quote, Chart, News, Analysts, Financials TSX:RCI.B) and lifted his price target to $58.00 from $57.00, arguing that too much pessimism is priced into the stock and that clarity on leverage and sports asset monetization could drive upside.

“We believe uncertainty around the company’s leverage outlook remains an overhang on the stock,” Valentini said. “We continue to believe that management will be able to deliver on its strategy to improve leverage. Our sense is too much bad news is currently priced into the stock and the valuation discount for RCI.B versus BCE/T should narrow.”

Headquartered in Toronto, Rogers is Canada’s largest wireless and cable operator with nationwide subscribers and extensive media and sports holdings. As the largest wireless carrier by revenue exposure, it stands to benefit from stabilizing pricing trends. Valentini noted that during the recent back-to-school period, entry-level wireless prices were $5–7 higher year-over-year.

“If the current trends in pricing hold, we believe that industry ARPUs can turn at least flat by mid-2026,” he said, adding that Rogers has more upside torque than peers if pricing strength is recognized.

A key catalyst is the potential sale of equity in Rogers’ sports holdings, which include a 75% stake in Maple Leaf Sports & Entertainment and full ownership of the Toronto Blue Jays. Valentini values the sports teams at $17 per share within his $58 target, though management estimates the broader sports, entertainment and media portfolio could be worth as much as $27 per share.

“Clarity on this file could surface another $7–10 per share in value for RCI.B,” he said, noting management’s right and intent to buy out Kilmer’s 25% MLSE stake by mid-2026.

Other factors supporting improved free cash flow include lower capital spending, with management now guiding to the low end of $3.8–$4.0-billion in 2025 and further reductions beyond, as well as lower restructuring costs following Shaw-related integration charges. Outflows from credit card balances are also expected to ease as securitization structures are finalized.

Insider buying has bolstered sentiment, with Chair Edward Rogers recently acquiring 950,000 shares at an average of $48.22.

Valentini emphasized that while Rogers’ leverage profile remains higher than peers, monetization of sports assets could provide meaningful de-leveraging. He also highlighted Rogers’ strong position in wireless, spectrum holdings, and bundling opportunities given its broadband reach to about 60 per cent of Canadian households.

“These bundling and cross-selling efforts can be bolstered by the fact that Rogers touches 80%–85% of all Canadians when including the sporting and concert events that they now control, versus just 40% reach for discrete cable and wireless subscribers,” he wrote.

Valentini forecasts Adjusted EBITDA of C$9.73-billion on $21.34-billion in revenue in fiscal 2025, improving to C$10.08-billion on $22.39-billion in fiscal 2026.

TD Cowen’s Canada Best Ideas 2025 report highlights its highest-conviction Canadian picks across a coverage universe of nearly 1,300 companies, with more than 80 analysts contributing research.

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