* Canaccord Genuity’s Aravinda Galappatthige cut his BCE Inc. (BCE-T) target to $33 from $37.50 with a “hold” rating. The average is $40.64.
“We have revisited our BCE model with a view to firming up our 2025 and also our 2026 estimates well ahead of Q4/24 reporting, which would feature 2025 guidance,” he said. “In addition to adjustments to capex factoring in recent management comments, we have also made some revisions around the timing of M&A. In particular, our estimates now reflect the Ziply acquisition closing on October 1 vs our prior expectation of earlier in Q3/25. All said, in terms of 2025, we expect to see flat adj EBITDA in 2025 (0.6-per-cent growth, reported and organic) but higher FCF year-over-year (10 per cent) due to the low base in 2024, which is impacted by an upswing in working capital use, severance payments, lower Canadian capex, partially offset by Ziply in Q4/25. In terms of adj EPS, we expect to see the familiar decline rate of 5 per cent in 2025, broadly similar to 2023A and 2024E.
“How we view BCE in light of ongoing sell-off: BCE’s share price continues to struggle, down 13 per cent over the past month and a staggering 37 per cent year-to-date. While the most recent phase of pressure is likely tax loss selling related, we believe that there is an underlying loss of confidence in the stock that is also playing out. Essentially, BCE’s long held mantle as a highly defensive, low beta stock is no longer valid, we would argue. This, in turn, could lead to a material change in shareholder composition. In addition, sentiment around the broader Canadian telecom space remains weak with pricing pressure and expectations of easing volume growth, together with levered balance sheets having an impact.”