01:12 PM EST, 02/27/2024 (MT Newswires) -- Two weeks after Bell reported Q4 results, introduced 2024 guidance, raised its dividend +3%, and announced a -9% headcount reduction, National Bank hosted the company's CEO.
Highlights:
Bell sees its core franchise as particularly strong, with fibre performing very well, wireless strength in premium, and Virgin brand doing better. After being under-penetrated versus its cable peers on bundling, Bell is seeing dramatic improvement in the momentum of its bundling capabilities, writes analyst Adam Shine. More effort has been made to also do better among those new to Canada.
Bell won't do a DRIP discount like its Big 3 peers that would quickly bring its payout sub-100% per its FCF definition. It noted few years back it would operate at a payout above 100% from 2021 to 2025. Capital allocation priorities are: dividend, growth capex, transformation capex, M&A, debt and NCIB. Capital intensity <16.5% in 2024 could fall to 14%-15% soon after 2025.
Waiting to see if CRTC's final TPIA decisions will make sense. While Bell appeals CRTC's interim Nov. 6 decision, it wants final TPIA decision (could come in spring) to apply nationally (not just Ontario/Quebec) and be restricted to independent resellers rather than allowing incumbents to ride on each other's networks which will undermine future capex spend. "We see unwise regulatory decisions getting appealed & curbing network investments."
Maintain Outperform, $55 target.
Price: 50.56, Change: +0.24, Percent Change: +0.47