Analyst expects solid wireless results from Telus
Telus Corp. is expected to post strong wireless results next week given the robust market and limited competition from Shaw Communications Inc.-owned Freedom Mobile, Barclays analyst Phillip Huang wrote in a note Thursday.
Even though its top competitors, Rogers Communications Inc. and BCE Inc., already reported gaining more wireless subscribers than expected, Huang expects Telus will post a “healthy share” of new customers in a market driven by immigration and rising adoption among preteens and the elderly.
“We also believe Freedom Mobile continues to have limited impact on the mid-to-high end of the market,” Huang noted, pointing to its relative lack of LTE smartphones.
Freedom, formerly known as Wind Mobile, offers six LTE smartphones not including Apple devices. The other providers each sell about two dozen phones that connect to next-generation networks.
Barclays’ target price for Telus remains at $50. Its stock closed at $45.02, down 0.35 per cent, on Thursday.
Huang also anticipates Telus will update its annual guidance to reflect the approximately 105,000 subscribers added to its books on April 1 as part of the Bell-MTS deal that stipulated Bell must divest a chunk of customers to Telus.
Intense competition from Shaw, however, may dampen Telus’ results in its Internet and television segments, Huang wrote. Telus had few promos despite Shaw’s aggressive push to sell its highspeed Internet and new Internetprotocol TV product — a campaign that resulted in stronger than expected subscriber growth for its quarter ending Feb. 28.
“As such, we expect Telus to report slower first-quarter fixed line subscriber growth,” he wrote.
But Telus is making strides to promote its high-speed fibre Internet service as it builds out its infrastructure, Huang added, and online feedback appears favourable thus far.
Huang expects Telus will announce another seven to 10 per cent annualized dividend increase, a rise that’s consistent with management’s previous announcements.
Telus reports its first-quarter results May 11, the same day as its annual general meeting.