Last Update 18 Dec 25

Fair value Increased 0.70%

RCI.B: Sustainable Pricing And 2025 EBITDA Expectations Will Support Upside Outlook

Analysts have nudged their price targets on Rogers Communications modestly higher, with aggregate fair value estimates edging up by about $0.40 per share as they factor in sustainable pricing improvements, slightly stronger revenue growth, and higher 2025 EBITDA expectations, despite a marginally lower profit margin outlook.

Analyst Commentary

Recent Street research reflects a broadly constructive stance on Rogers Communications, with a series of incremental price target increases in both U.S. dollar and Canadian dollar terms. While opinions differ on the degree of upside, most coverage points to improving fundamentals and a more supportive earnings outlook into 2025.

Bullish Takeaways

Bullish analysts see the recent price target hikes as confirmation that Rogers is executing on pricing strategies, supporting a higher revenue growth trajectory without meaningfully elevating churn risk.
Upward revisions to 2025 EBITDA estimates, including from JPMorgan, are being driven by expectations of operating leverage, targeted cost controls, and incremental contributions from sports and media assets such as the Blue Jays playoff run.
Several bullish analysts highlight that the progressive lifts in Canadian dollar targets suggest the stock’s risk reward has improved, with valuation still at a discount to perceived long term growth and synergy realization potential.
Ongoing target increases clustered over a short time frame are interpreted as a sign that execution is tracking ahead of earlier models, giving confidence that management can deliver on medium term guidance.

Bearish Takeaways

Bearish analysts and those maintaining more neutral stances argue that the magnitude of the price target raises remains modest, implying that much of the near term operational improvement is already reflected in current valuations.
Some caution that margin expansion could prove more limited than bulls expect, as competitive intensity and inflationary pressures on network and labor costs may offset part of the pricing benefits.
There is concern that event driven tailwinds, such as stronger sports related earnings, may not be sustainable, which could temper growth once these one off benefits normalize.
More conservative valuation frameworks emphasize execution risk around integration and capital allocation, suggesting that any missteps on debt reduction or network investment could cap multiple expansion.

What's in the News

Rogers launched Amazon Luna cloud gaming on Rogers Xfinity, adding instant access to over 100 games through its entertainment platform without a console. Broader availability to millions of additional Xfinity customers is planned for next year (Product related announcement).
The company introduced Rogers Satellite, a first of its kind satellite to mobile service that supports popular apps and IoT connectivity in remote areas. Plans include expansion to data, voice, and nationwide 911 voice services, along with promotional pricing for early adopters (Product related announcement).
Rogers and the Eastern Ontario Regional Network activated 34 new 5G cell towers across eastern Ontario, advancing a 332 tower buildout aimed at closing rural coverage gaps and boosting public safety and connectivity for municipalities and Indigenous communities (Product related announcement).
Rogers Xfinity Pro was launched as a premium WiFi 7 add on that offers multi gig speeds, device prioritization, and Storm Ready WiFi backup to maintain home connectivity during power or network outages (Product related announcement).
Rogers reaffirmed its 2025 financial guidance for total service revenue growth of 3% to 5%, indicating confidence in its medium term outlook despite ongoing competition and cost pressures (Corporate guidance).

Valuation Changes

The fair value estimate has risen slightly to approximately CA$59.46 per share from CA$59.04 per share, reflecting modestly improved fundamentals in the model.
The discount rate has increased marginally to about 6.15% from 6.12%, indicating a slightly higher assumed cost of capital and risk profile.
Revenue growth has edged up fractionally to roughly 3.92% from 3.91%, suggesting a nearly unchanged but slightly more optimistic top-line outlook.
The net profit margin has fallen slightly to around 11.44% from 11.56%, pointing to a modestly softer long-term margin assumption.
The future P/E has risen slightly to about 14.39x from 14.13x, implying a small expansion in the valuation multiple applied to forward earnings.

Expanded rural wireless coverage and advanced infrastructure investments position Rogers to capture new subscribers and drive growth through innovative services and connectivity.
Cost efficiencies, disciplined deleveraging, and potential sports/media asset monetization support higher earnings, margin improvement, and investment capacity for future opportunities.
Regulatory risks, market saturation, ARPU pressure, high leverage, and ongoing cord-cutting threaten Rogers' long-term revenue growth, profitability, and financial flexibility.

Catalysts

About Rogers Communications

Operates as a communications and media company in Canada.What are the underlying business or industry changes driving this perspective?

Rogers' launch of satellite-to-mobile texting, with a road map to add voice and data services, greatly expands their wireless coverage across rural and remote regions, positioning the company to benefit from rising demand for reliable connectivity and to tap into new subscriber growth opportunities; this is likely to impact future revenue and ARPU positively.
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.
Successful cost efficiency initiatives in Cable-encompassing network integration, reduced capital intensity, and improvements in customer care-are structurally lowering expenses and supporting higher EBITDA margins, setting a foundation for more robust earnings growth as the company scales.
The near-term integration and longer-term monetization of sports/media assets, notably MLSE, remains a significant hidden value driver; proactive moves to surface or monetize these assets could unlock value for shareholders and bolster net earnings.
A disciplined approach to delevering following the Shaw acquisition, demonstrated by the accelerated reduction in leverage and improved free cash flow, enhances Rogers' capacity to invest in future growth trends (like AI-driven services and digital infrastructure) while protecting net margins.

Rogers Communications Earnings and Revenue Growth

Rogers Communications Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Rogers Communications's revenue will grow by 4.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 7.3% today to 10.4% in 3 years time.
Analysts expect earnings to reach CA$2.4 billion (and earnings per share of CA$4.61) by about September 2028, up from CA$1.5 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as CA$1.8 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 15.4x on those 2028 earnings, down from 17.5x today. This future PE is lower than the current PE for the CA Wireless Telecom industry at 17.5x.
Analysts expect the number of shares outstanding to grow by 1.08% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.91%, as per the Simply Wall St company report.

Rogers Communications Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Regulatory uncertainty-particularly the CRTC's recent decision to mandate access for competitors on large networks and the possibility of further government intervention-poses long-term risks of reduced pricing power and potential cuts to capital investment, which could compress revenues and margins.
Slowing growth in wireless subscriber net adds-driven by reduced immigration and overall market maturation-signals that the Canadian wireless market is approaching saturation, limiting Rogers' ability to drive substantial top-line revenue expansion in the long term.
Ongoing ARPU (average revenue per user) pressures, partially caused by intense promotional activity, competitive pricing, the proliferation of multi-line discounts, and declining roaming revenues, threaten to suppress service revenue growth and net earnings.
High leverage following recent acquisitions (Shaw and MLSE), even after progress on delevering, raises long-term refinancing and interest rate risks that could constrain financial flexibility and weigh on net margins if organic growth and cost synergies do not fully materialize.
Secular trends of cord-cutting and persistent video subscriber losses in the Cable segment, as well as shifting media consumption patterns to OTT platforms, continue to erode legacy revenues, challenging the sustainability of both Cable and Media profitability and overall EBITDA expansion.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of CA$55.441 for Rogers Communications based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$71.0, and the most bearish reporting a price target of just CA$40.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be CA$23.4 billion, earnings will come to CA$2.4 billion, and it would be trading on a PE ratio of 15.4x, assuming you use a discount rate of 6.9%.
Given the current share price of CA$49.27, the analyst price target of CA$55.44 is 11.1% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

RCI.B: Margin Improvements And Major League Sports Will Affect Earnings Outlook