Scotiabank analyst reveals his top picks in telecom stocks

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“Rogers Communication Inc … We include RCI in our top picks because of its strong margins, market share gains, strong FCF generation, and attractive valuations from a North American point of view. We believe de-leveraging will eventually force the stock’s multiples up, and we expect the tailwinds from the Shaw acquisition synergies to provide continued ammunition for improved market share gains in wireless. TELUS Corporation ...

“We’re out with an update following the recent surge in shares. We believe that the co. has become a ‘reluctant OEM’ , with investments in autos minimized to support FCF while prioritizing higher growth/multiples ventures. As a result, we think the co. could use the recent runup in shares to issue a capital raise, especially given interest in building an edge in batteries, robotaxi/full self-driving and robotics. Our updated estimates assume flattish volumes this year at ~1.

“India appears as among the least exposed of regional markets to Trump’s adverse trade policy. Moreover, so long as energy prices remain stable, India may offer a relative oasis of FX stability in an era of a strengthening US dollar. Paradoxically, India has seen strong net foreign investor selling since October, while investors we met this year have been waiting specifically for such a buying opportunity to address Indian underexposure.

“‘Zeitgeist: “Not a great time to be long real estate in Washington DC.’ … investors all-in on Trump 2.0=“US exceptionalism”; so tough for allocators to call top in US asset price hubris, but US$ now at 55-year high, US stocks vs world at 75-year high … but as bulls extend, US financial conditions tightening, and cracks in leverage emerging as Fed cuts priced out; further rise in long rates GT30 to 5%, short rates GT2 to 4.

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