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Investing.com - BMO Capital has raised its price target on Rogers Communications (TSX:RCIa) (TSX:RCI/B) (NYSE:RCI) to C$57.00 from C$55.00 while maintaining an Outperform rating on the stock. According to InvestingPro, the company, currently trading at $30.96, maintains a GOOD financial health score and offers a compelling 4.82% dividend yield.
The wireless pricing environment appears to be improving for Rogers, with BMO noting that operators raised prices in April and have largely maintained those levels throughout the quarter. This represents a less negative pricing environment for the telecommunications company, which has achieved 1.5% revenue growth over the last twelve months, generating $14.37 billion in revenue.
BMO Capital expects modest cable revenue growth to return for Rogers Communications for the balance of 2025. The firm also highlighted that Rogers has completed a $7 billion structured equity transaction.
The investment bank noted that the MLSE (Maple Leaf Sports & Entertainment) transaction is expected to be finalized soon. BMO specifically mentioned that Rogers’ sports assets provide "significant upside potential" for the company.
BMO made modest increases to its forecasts for Rogers, with a marginal decrease in wireless performance effectively offset by improvements in the Cable and Media segments, leading to the price target increase to C$57.
In other recent news, Rogers Communications reported steady financial performance for the first quarter of 2023, with service revenue and adjusted EBITDA both increasing by 2% year-over-year. The company’s wireless service revenue also rose by 2%, driven by subscriber growth, while free cash flow remained stable at $586 million. Additionally, Rogers announced the completion of a CDN$7 billion equity investment from Blackstone (NYSE:BX) and several Canadian institutional investors in a Rogers subsidiary, which owns part of its wireless infrastructure. This transaction, involving Blackstone Credit & Insurance, provides Rogers with significant capital while maintaining operational control. Furthermore, Rogers received approval from the Canadian Radio-television and Telecommunications Commission to acquire Bell’s stake in Toronto Raptors Network Ltd, expanding its ownership in Maple Leaf Sports & Entertainment to 75%. This C$4.7 billion acquisition aligns with Rogers’ strategy to focus on live sports and entertainment. Lastly, all nominated directors were re-elected at Rogers’ recent Annual General Meeting, and shareholders approved the appointment of the company’s auditors, ensuring continuity in its corporate governance.
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