Shares of BCE Inc. experienced a significant drop, hitting a low not seen in over ten years, and Rogers Communications Inc. experienced its largest decline in 2024 following a gloomier telecom sector forecast from BMO Capital Markets.
BCE and Quebecor Inc. were both downgraded by analyst Tim Casey, who reduced Rogers' price target from $80 to $65. These three companies, along with Telus Corp., are key players in Canada's wireless and cable industry.
The prominent telecom analyst anticipates increased competition and decreased cable revenue to impact Rogers' core sales in the third quarter. Additionally, BCE and Quebecor are engaging in a pricing battle in Quebec, putting pressure on profit margins.
BCE's stock fell by 2.5% to $44.74, reaching its lowest intraday level since October 2013. Both Rogers and Quebecor experienced a three percent decline.
Rogers' decline occurred almost a year after the completion of its significant acquisition of Shaw Communications Inc.which is Telus’s primary rival in various Western Canadian markets.
While some analysts were optimistic about Rogers due to the acquisition, expecting substantial cost savings, challenges from intensified competition are impacting cable revenue. Casey reduced his EBITDA forecast for Rogers by around seven percent for this year and six percent for next year.
- Telecoms inform MPs that mobile plans are becoming more affordable
- Cogeco appoints a new CEO as Philippe Jette steps down
- BCE secures a $1.45 billion loan from the U.S. debt market
Casey downgraded BCE and Quebecor from outperform to market perform, citing a more competitive environment leading to a less optimistic growth outlook for both companies.
