Post by
HoneyBadger77 on Mar 24, 2024 3:25pm
RBC Latest Outlook and PT For BCE - $57 CAD
Here's the latest BCE analysis from RBC (just out today). I don't see a lot more downside from here (maybe 5% at most vs. a 20% upside). The Fundamentals are a bit fuzzy but the Technicals are now at or very near a bottom. And so in my experience when fundamentals are fuzzy (especially when it comes to these large caps), investors / traders tend to lean more toward the Technicals. So for those that are worried a dividend cut and recouping their losses, I'd say now is not the time to be running for the hills. You might want to consider buying a PUT for some downside protection or selling a Covered Call and get some extra return while you wait this out. There's ways to help you sleep better at night (outside of drugs and alcohol...Lol).
Just as a comparison, Morningstar has a 5 star rating on all of the 3 top CAD Telecoms and 1 year performance % as of today as follows:
BCE -23.83% Div 8.7%
TELUS -19.47% Div 6.91%
ROGERS - 9.56% Div 3.56%
With BCE's $42B market cap vs. Telus at $32B, and $24B for Rogers, BCE has a lot more Chess pieces to move around and I believe will do whatever is necessary to avoid reducing their dividend payouts and so does this RBC analyst. As per the highlighted comments below in the Investment Summary; "We believe underlying FCF in the current growth environment should continue to support low-single digit dividend growth underpinned by ongoing structural cost efficiencies and what is likely a permanent stepdown in capex following three years of elevated FTTH investment."
RBC's lowest down side target price is $48 CAD an I'd be quite surprised to see it fall below that, especially with Canada's economy expect to improve in 2024 and interest rates likely to come down.
My opinion only, please DYODD
HB77
Sector Perform TSX: BCE; CAD 45.86; NYSE: BCE Price Target CAD 57.00
March 24, 2024 (Updated Today)
BCE Inc.
Company description BCE is Canada’s largest telecom services company and one of the country’s largest corporations. BCE provides local, long distance, wireless, satellite, television, and Internet services across Canada. BCE has a 100% stake in Bell Media, Canada’s largest integrated media company.
Investment summary
We believe BCE is well equipped to navigate a slower revenue environment leaning on a scale advantage, continued FTTH investment and Internet market share gains, the realization of cost efficiencies, and an extensive array of tactical initiatives across wireless, wireline and media. We believe underlying FCF in the current growth environment should continue to support low-single digit dividend growth underpinned by ongoing structural cost efficiencies and what is likely a permanent stepdown in capex following three years of elevated FTTH investment. While we see more attractive growth and valuation set-ups elsewhere in the sector at the moment, we continue to view BCE as a higher-quality core holding that is well positioned to benefit from network convergence and long-term growth in 5G B2B (IoT, MEC, private network, cloud, security).
Potential catalysts for the stock
• Increased visibility on wireless competition
• Acceleration in wireline data growth driven by Internet penetration and improved business market conditions
• Greater-than-expected cost efficiencies
• A greater-than-expected revenue contribution from 5G
• A decline in bond yields