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Why Rogers Communications Stock Is Back in Focus After Q1 Results
Rogers Communications (TSX:RCI.B) is back on investors’ radar after its first quarter update, with higher year over year sales and earnings per share and fresh attention on free cash flow and media assets.
See our latest analysis for Rogers Communications.
The Q1 update, dividend affirmation and new satellite to mobile roaming service have all landed against a mixed price backdrop. A recent 8.1% 7 day share price return contrasts with a 5.5% year to date share price decline and a 47.4% 1 year total shareholder return, suggesting longer term momentum has been stronger than the shorter term pullback.
If this kind of rerating story has your attention, it can be useful to see what else is moving and compare against 33 power grid technology and infrastructure stocks
With Q1 earnings per share at CA$0.80 to CA$0.81, a quarterly dividend of CA$0.50 and the share price sitting at CA$49.26, the real question is whether this is a mispriced telecom-media hybrid or if the market already sees the future growth story.
Most Popular Narrative: 16.7% Undervalued
Rogers Communications last closed at CA$49.26, while the most followed narrative points to a fair value near CA$59.10, framing the latest Q1 update against a larger earnings and cash flow story that stretches out to 2029.
The continued deployment and expansion of 5G and Wi-Fi 7 infrastructure, along with the introduction of advanced services like fixed wireless internet and bundled offerings, allows Rogers to capitalize on increasing mobile data consumption and connected device proliferation, supporting both subscriber additions and higher margins in future periods.
Curious what kind of revenue path and margin reset sit behind that valuation gap? The narrative leans on slower top line assumptions, a sharply different profit profile, and a higher future earnings multiple than the market is pricing in today.
Result: Fair Value of CA$59.10 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, there is still a risk that tougher telecom pricing and ongoing cord cutting in Cable and Media could blunt the earnings power behind that 16.7% discount.
Find out about the key risks to this Rogers Communications narrative.
Next Steps
With sentiment clearly mixed, both on the upside potential and the risks, it makes sense to review the details yourself and move quickly to shape your own view based on the 5 key rewards and 3 important warning signs.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include RCI-B.TO .
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