BMO maintains Quebecor stock with Cdn$37.00 target

Published 28/01/2025, 17:34
BMO maintains Quebecor stock with Cdn$37.00 target

On Tuesday, BMO Capital Markets maintained its Market Perform rating on Quebecor (QBR-B:CN) (OTC: QBCRF) shares, with a steady price target of Cdn$37.00. The decision comes as Freedom Mobile, a subsidiary of Quebecor, implements price hikes across its various rate plans, coupled with enhancements in service quality. Notably, these improvements include the introduction of 5G+ speeds in select metropolitan areas, expanded data allocations, and better international roaming options.

The price adjustments, estimated at approximately Cdn$4-5, are seen as a positive move against the backdrop of aggressive pricing competition that has characterized the industry over the previous year and a half. BMO Capital’s analysis suggests that these changes may contribute beneficially to Quebecor’s position in the market.

However, the firm anticipates that any significant improvements in key performance indicators (KPIs) for Quebecor will require time to materialize. The first quarter is typically a period of lower activity within the industry, which may delay the visibility of these enhancements’ impact on the company’s performance.

Freedom Mobile’s strategy to raise plan prices while simultaneously upgrading service quality is part of Quebecor’s response to the competitive pressures in the telecommunications sector. The enhancements to its offerings, particularly the upgrade to 5G+ speeds and better roaming features, aim to provide added value to customers despite the price increase.

BMO Capital’s reiteration of the Market Perform rating indicates a neutral outlook on Quebecor’s stock, suggesting that the firm does not foresee significant stock movement in the near term. The price target of Cdn$37.00 remains unchanged, reflecting the firm’s consistent view on the stock’s valuation.

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