Is it time to sell your Telus stock?

National Bank Financial analyst Adam Shine downgraded Telus (Telus Stock Quote, Chart, News, Analysts, Financials TSX:T) after a larger-than-expected dividend cut, light Q2 results and a guidance reduction that exceeded Street expectations.

As reported by the Globe and Mail, Shine lowered his rating to “Sector Perform” from “Outperform” and cut his target to $15.00 from $19.00. The average target is $15.98, according to LSEG data.

“While we welcome the belated reset of the dividend and pending reveal of more details of new management’s developing plan, we’re compelled to go to the sidelines as we digest the material disconnect between Telus’ old and new outlooks and await more steps to restore its credibility,” Shine said in his August 4 report.

Telus shares fell 11.3% Friday after the company cut its quarterly dividend to 18.75 cents per share from 41.84 cents. Telus expects the reduction to generate about $2.7-billion of cash savings through 2028.

The telco also lowered its 2026 outlook. It now expects revenue to be flat to down 2%, compared with previous guidance for growth of 2% to 4%. Adjusted EBITDA is expected to fall 2% to 4%, compared with prior guidance for growth of 2% to 4%.

“We and others on the Street lowered 2026 revenues/EBITDA in 2Q previews below prior outlook which we thought would get revised with 2Q reporting, but the revision under Telus’ new CEO/CFO was disappointingly more than expected,” Shine said.

Telus also raised its capital spending forecast to $2.6-billion from $2.3-billion, citing inflation, supply chain dynamics and spending on sovereign AI data centres. Free cash flow guidance fell to $1.8-billion from $2.45-billion.

Shine said Telus expects growth to return next year, with free cash flow projected to grow at a compound annual rate of at least 10% from 2026 to 2028. But he said investors now need more evidence that management can restore credibility after the reset.

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