Buy Rating Maintained for Rogers Communications Amidst Competitive Pressures and Shaw Merger Synergies

Analyst Tim Casey from BMO Capital assigned a Buy rating on Rogers Communication (RCI – Research Report) and decreased the price target to C$65.00 from C$80.00.

Tim Casey has given his Buy rating due to a combination of factors, including Rogers Communication’s strong performance in the wireless sector and the anticipated cost synergies from the Shaw acquisition. Despite lowering growth outlook and adjusting target price due to competitive pressures and non-recurring items, Casey sees Rogers as a leader in the wireless market. The company is expected to maintain its lead in terms of customer acquisition, average revenue per user (ARPU), and service revenue, benefiting from its operational strength and substantial distribution network.
Moreover, the analyst acknowledges the challenging conditions in Quebec but notes that Rogers’ limited exposure in the region minimizes the impact on the company. While competitive intensity has led to a modest reduction in cable revenue and EBITDA estimates, Rogers is on a clear path to realize significant cost savings from the Shaw merger, which is poised to strengthen its balance sheet and potentially enhance shareholder returns through future dividend growth. The adjusted target price of $65, down from $80, still represents a vote of confidence in Rogers’ ability to navigate the competitive landscape and capitalize on its strategic advantages.

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Rogers Communication (RCI) Company Description:

Incorporated in 1960, Canada-based Rogers Communications, Inc. provides wireless communications services. It operates its business through the following segments: Wireless, Cable, and Media.