Should you sell your Quebecor stock?

RBC Dominion Securities analyst Drew McReynolds downgraded Quebecor  (Quebecor Stock Quote, Chart, News, Analysts, Financials TSX:QBR.B) to “Sector Perform” from “Outperform” in an Oct. 14 update, citing the stock’s strong year-to-date performance and limited near-term upside after significant multiple expansion.

He raised his price target, however, by $1.00 to $46.00, slightly above the Street average of $44.52.

“Despite stepping to the sidelines, we continue to expect Quebecor to execute on its national wireless strategy, returning to sustained revenue and Adjusted EBITDA growth within its Telecommunications segment in 2025,” McReynolds said.

As reported by the Globe and Mail, the analyst said that “the baton shifts from multiple expansion to NAV growth” for the Montreal-based telecom and media company, which owns Videotron, TVA Group, and Freedom Mobile.

“We saw an attractive risk-reward setup heading into 2025, with renewed growth in Telecommunications serving as a catalyst for multiple expansion,” he said. “Following strong year-to-date performance driven mainly by multiple expansion, from 6.2 times forward 12-month EV/EBITDA at the beginning of the year to 7.0 times currently, we expect the driver of upside in the shares to shift from multiple expansion to NAV growth.”

McReynolds forecasts a 2025–2028 NAV CAGR of 12%, supported by improving wireless revenue growth, robust free cash flow generation, and debt repayment enabled by Quebecor’s low dividend payout ratio of 30–35% of FCF.

“At a forward EV/EBITDA multiple of 7.0 times, we believe the company’s growth outlook is now adequately reflected in the stock,” he said, adding that RBC is “looking for more attractive or timely entry points.”

RBC’s Telecommunications forecast assumes roughly 2% annual revenue growth and 2–3% Adjusted EBITDA growth through the medium term, driven primarily by wireless subscriber gains, annual net additions of about 315,000, and a return to modest low-single-digit wireless ARPU growth beginning in 2026.

McReynolds reiterated that Quebecor remains well positioned for long-term value creation through its expanding national wireless footprint, strong free cash flow profile, and disciplined capital allocation, but that “much of this optimism is now priced in following the stock’s strong 2025 run-up.”

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