Telus International stock rating downgraded to Hold by Stifel on acquisition

Investing.com - Stifel downgraded Telus International (NYSE:TIXT) from Buy to Hold while raising its price target to $4.50 from $4.00 following the announcement of a definitive acquisition agreement. The stock has shown remarkable strength, gaining over 65% in the past six months and currently trading near its 52-week high of $4.60, though InvestingPro data indicates the stock is in overbought territory.

Telus Corporation has agreed to fully acquire Telus International at $4.50 per share, representing a 32% premium to Telus’s initial bid of $3.40 per share.

The transaction values Telus International at approximately 5.8x C26 EBITDA, which Stifel notes is at the upper end of the 4-6x range typical for customer experience outsourcing peers.

Stifel believes this valuation is appropriate given the "better-than-expected stabilization in Telus Digital’s business as seen in recent quarters."

The deal has received unanimous recommendation from Telus International’s special committee, with support from the company’s second-largest shareholder EQT as well as Telus International directors and officers, leading Stifel to conclude "this is a done deal."

In other recent news, TELUS International reported its earnings for the second quarter of 2025, exceeding analyst expectations. The company achieved an earnings per share (EPS) of $0.06, surpassing the forecasted $0.05. Revenue also outperformed projections, reaching $699 million compared to the anticipated $660.62 million. These results indicate a positive performance for TELUS International in the recent quarter. Despite the strong earnings and revenue figures, the stock experienced a decline in pre-market trading. No mergers or acquisitions were reported in the latest updates. Additionally, there were no reports of analyst upgrades or downgrades for TELUS International. These developments provide investors with a clearer picture of the company’s recent financial performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.