RCI.B: Sustainable Pricing And Lower Costs Will Support Modest Upside Potential

Rogers Communications’ fair value price target has been modestly raised from $58.69 to $58.93. This reflects analysts’ view that sustainable pricing improvements and lowered costs are supporting a more favorable outlook for the company.

Analyst Commentary

Recent analyst commentary has highlighted both optimism and ongoing caution regarding Rogers Communications' performance and outlook. As reflected in a series of price target increases, the market response has been shaped by key factors in the company’s execution and environment.

• Bullish analysts have raised price targets in response to signs of sustainable improvement in pricing, suggesting confidence in the company's ability to maintain momentum in revenue growth.
• Increases in profitability estimates are being driven by lower costs, which have significantly aided EBITDA projections for the coming year.
• Recent events, such as the Blue Jays’ playoff run, are viewed as beneficial to the company's broader media and sports portfolio and are contributing positively to financial performance.
• The general trend of upward price target revisions points to confidence in Rogers’ ability to deliver operational improvements over the medium term.

• Bearish analysts have maintained more cautious ratings despite price target increases, indicating persistent concerns around the pace and durability of execution improvements.
• Some continue to see sector and competitive risks as limiting factors on Rogers’ valuation expansion, even as forecasts are revised upward.
• The measured nature of some price target increases signals that not all concerns about subscriber growth and market competition have been fully addressed.

What's in the News

• Rogers announced Rogers Xfinity Pro, a next-generation WiFi add-on for all Xfinity Internet plans. The add-on features WiFi 7 technology, device prioritization, and backup connectivity to keep customers online during outages (Key Developments).
• The company introduced Rogers Xfinity StreamSaver, a bundled streaming package with Netflix, Disney+, and Apple TV+, offered at more than 30% savings compared to separate subscriptions (Key Developments).
• Expansion of Rogers Satellite now gives customers text and emergency text coverage across three times more area than any other Canadian wireless provider, providing service even in the most remote national parks and coastal areas (Key Developments).
• Rogers Communications reaffirmed its full-year 2025 financial guidance with expected total service revenue growth between 3% and 5% (Key Developments).
• A national class action lawsuit has been authorized against Rogers, Fido, and Chatr, related to the April 2021 network outage. If successful, the lawsuit could result in compensation for affected customers (Key Developments).

Valuation Changes

• Consensus Analyst Price Target (Fair Value): Increased slightly from CA$58.69 to CA$58.93, reflecting modest analyst optimism.
• Discount Rate: Risen marginally from 5.97% to 6.12%. This indicates a slightly higher risk assessment applied to future cash flows.
• Revenue Growth: Essentially unchanged. The projection remains near 3.91% year-over-year.
• Net Profit Margin: Remains virtually flat, with the latest estimate at 11.56%.
• Future P/E (Price-to-Earnings) Ratio: Decreased modestly from 14.26x to 14.10x. This suggests somewhat lower anticipated valuation multiples.