Cogeco Communications Inc T.CCA

Alternate Symbol(s): CGEAF

Communication Services Telecom Services

Cogeco Communications Inc. is a telecommunications company. Through its business units Cogeco Connexion and Breezeline, it provides Internet, video and phone services in the provinces of Quebec and Ontario, as well as in 13 states in the United States. The Company’s segments include Canadian telecommunications and American telecommunications. The Canadian telecommunications activities are carried out by Cogeco Connexion in the provinces of Quebec and Ontario. The American telecommunications activities are carried out by Breezeline in 13 states: Connecticut, Delaware, Florida, Maine, Maryland, Massachusetts, New Hampshire, New York, Ohio, Pennsylvania, South Carolina, Virginia and West Virginia. It provides its residential and small business customers with Internet, video and telephony services through its two-way broadband cable network. It provides a range of Internet, video and phone services primarily to residential customers and business services across their coverage areas.

TSX:CCA - Post by User

Cogeco Communications Inc

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Post by retiredcfon Jan 15, 2021 8:26am

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Post# 32304399

TD

This is a flash report so it's possible that they may raise their current $125 target. GLTA

Cogeco Communications Inc.

(CCA-T) C$96.00

EBITDA/EPS Beat Consensus by 6%/15%

Event

Q1/21 results and increased 2021 guidance.

Impact: POSITIVE

Before we highlight the material positive surprises in Q1/21 (on all key financial metrics and another massive quarter for broadband sub adds in the U.S.), let us remind investors that CCA shares are down 15% in the LTM vs. gains of 22%, 20%, and 8% for Charter, Altice USA, and Comcast, respectively. Also, at Thursday's close, CCA was trading at 6.4x 2021E EBITDA vs. a range of 8.8x-10.4x for those U.S. comps. The failed takeover bid seems to have distracted investors from the underlying momentum and fundamental value in Cogeco's businesses (especially Atlantic Broadband), so we believe these strong results could cause a material upward move in the stock today.

The call starts at 9:30 a.m. ET (1-877-291-4570).
Adjusted EPS of $2.22 vs. TD/consensus of $1.98/$1.93.
Consolidated EBITDA of $311mm vs. TD/consensus of $300mm/$294mm. Some marketing costs were delayed because of the pandemic, but this was a still a great start to the year, and solid revenue/subscriber trends suggest that EBITDA would have beat even without the deferred opex.
Capex was better than expected, so FCF of $141mm beat consensus of $120mm.
Canadian Cable EBITDA was $186mm (+9% y/y - recall that Shaw Cable was +3%) compared with our estimate of $176mm (consensus $176mm).
HSI net adds were +3k vs. TD/consensus of +4k/+5k. Video net adds were -7k vs. TD/consensus of -6k/-5k.
U.S. Cable EBITDA was $139mm (+8% y/y, excluding both FX movements and the Thames acquisition) compared with our estimate of $136mm (consensus $131mm).
HSI net adds were +12k vs. TD/consensus of +4k/+5k. Video net adds were +1k vs. TD/consensus of -3k/-3k.
2021 guidance was increased to mid-to-high single-digit revenue/EBITDA growth (previously low single-digit), which now includes contributions from the DERY acquisition in Quebec (expected to contribute 3% to revenue/EBITDA growth). This acquisition was not funded with any CCA shares, so the increase in FCF growth guidance (low double-digit vs. low single-digit previously) is arguably more impressive than the revenue/EBITDA adjustments.