Aravinda Galappatthige, managing director and institutional equity researcher at Canaccord Genuity, joins BNN Bloomberg to discuss the outlook of Canadian telcos.
The S&P/TSX Composite’s communications index has been the worst group performer in the broader index so far this year, posting a loss of nearly 16 per cent since early January. The index is made up of heavyweight telco names like Rogers Communications Inc. and Telus Corp., whose stocks trade near their 2016 levels, as well as BCE Inc., whose shares hover around their lowest point since 2013.
This “promotional intensity” is weighing on growth and share prices, Shine said. Shares of BCE have slipped over 30 per cent, Telus’ stock is down 23 per cent and Rogers shares have declined 20 per cent since the latter closed its Shaw deal in April 2023. The companies start reporting second-quarter results in late July, and investors will be looking for a clearer picture on sustained revenue growth of around three per cent, which can only come from more stable pricing, McReynolds said. Rogers will be the first one to report on July 24, before the market opens.