Should you sell your Cogeco stock?

Cogeco Communications (Cogeco Communications Stock Quote, Chart, News, Analysts, Financials TSX:CCA) reported first-quarter fiscal 2026 results on Jan. 14, showing steady performance in Canada and a marked improvement in U.S. subscriber trends, though analysts remain cautious on the near-term outlook for the U.S. cable business.

Following the results, Desjardins Securities analyst Jérôme Dubreuil increased his target to $72.00 from $71.00 and reiterated a “Hold” rating. The average target on the Street stands at $88.88.

As reported by the Globe and Mail, Dubreuil said competitive pressures in the U.S. remain elevated, noting that the “U.S. cable winter appears to persist” as fibre overbuilds continue and incremental wireless spectrum boosts fixed wireless access capacity. That said, he acknowledged progress at Cogeco’s U.S. operations, pointing to the company’s lowest internet subscriber losses in 15 quarters alongside meaningful cost reductions.

Despite an estimated 18% free cash flow yield at Cogeco Communications, Dubreuil said he remains on the sidelines given ongoing uncertainty around the longer-term U.S. outlook.

For the quarter ended Nov. 30, 2025, Cogeco Communications reported revenue of $707.2-million, down 4.3% year over year, while Adjusted EBITDA declined 3.1% to $353.8-million, representing an Adjusted EBITDA margin of 50.0%. Free cash flow fell 15.7% to $125.5-million, reflecting lower EBITDA, higher capital expenditures, and the absence of prior-year sale-leaseback proceeds.

Management emphasized improving momentum in the U.S. business. President and CEO Frédéric Perron said U.S. subscriber trends improved for a second consecutive quarter, delivering the company’s best U.S. metrics in nearly four years.

Mr. Perron added that new sales and marketing initiatives, faster network speeds, and the upcoming launch of an oxio-like digital brand in the U.S. are expected to support further stabilization into the second half of fiscal 2026.

In Canada, Cogeco continued to add customers, supported by wireless expansion and rural Ontario network builds. Management also reaffirmed fiscal 2026 financial guidance and highlighted improved credit outlooks from both S&P and Moody’s, citing disciplined capital allocation.

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