Desjardins upgrades BCE stock rating to Buy on US expansion plans

Investing.com - Desjardins upgraded BCE Inc. (TSX:BCE) (NYSE:BCE) stock rating from Hold to Buy and raised its price target to C$40.00 from C$39.00. The telecommunications giant, currently offering a 5.53% dividend yield and maintaining payments for 55 consecutive years, appears undervalued according to InvestingPro analysis.

The upgrade follows Desjardins’ comprehensive analysis of BCE’s US expansion plans, which the firm estimates will generate approximately 12% internal rate of return (IRR) over the duration of the initiative.

Desjardins indicated that while the projected 12% return falls below management’s stated 20% objective, it suggests that the market’s negative reaction to BCE’s Ziply announcement was largely unwarranted.

The research firm acknowledged significant risks associated with BCE’s out-of-footprint expansion in an industry experiencing competitive "land grab dynamics."

Despite these concerns, Desjardins concluded that the deal "checks too many boxes" to maintain a negative stance, supporting its decision to upgrade the Canadian telecommunications company.

In other recent news, BCE Inc . announced its first-quarter 2025 earnings, reporting an earnings per share (EPS) of $0.63, which met analyst expectations. The company also reported revenues of $5.93 billion, aligning with forecasts. Additionally, shareholders of BCE Inc. approved all director nominees at the Annual Meeting of Shareholders, with each nominee receiving over 95% approval. This strong support was evident for all proposed items at the meeting. In a separate development, Scotiabank (TSX:BNS) upgraded BCE Inc.’s stock rating from Sector Perform to Sector Outperform. The upgrade is based on optimism surrounding wireless pricing in Canada, which analysts believe may improve in the coming months. Scotiabank set a new price target of Cdn$39.00 for BCE Inc. These developments highlight recent activities and decisions impacting BCE Inc.

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