Last Update 05 Apr 26

Fair value Decreased 1.08%

RCI.B: Wireless And Satellite Expansion Will Offset Rising Price War Concerns

Analysts have trimmed the Rogers Communications price target by about CA$0.65 to reflect slightly softer revenue growth and profit margin assumptions, a modestly higher discount rate, and a somewhat richer future P/E multiple in light of recent sector-wide price war concerns and mixed broker target revisions.

Analyst Commentary

Recent research on Rogers Communications shows a split view, with some analysts trimming price targets on pricing pressure concerns while others are still lifting targets on valuation and execution factors.

Bullish Takeaways

Bullish analysts are lifting price targets in increments of about C$1 to C$3, which suggests they see room for upside in the shares even after baking in current sector headlines.
Several recent target increases cluster in a similar range, indicating that bullish analysts view the current P/E as reasonable relative to their expectations for the business to execute on its plans.
The step up in targets, including moves such as to C$58 from C$57.75, points to incremental confidence in how Rogers is managing its balance between growth spending and profitability.
Supportive research highlights that, at current levels, the stock still screens as attractive to those who are comfortable with the sector’s competitive backdrop and see room for operational improvement.

Bearish Takeaways

Bearish analysts have recently downgraded the stock, citing an elevated risk of a price war in Canadian telecom, which they see as a potential drag on revenue growth and margins.
Some have cut price targets, including a C$2 reduction at JPMorgan, reflecting a more cautious stance on what they are willing to pay on a P/E basis if competition intensifies.
Downgrades across multiple Canadian telco names suggest concern that sector-wide pricing pressure could limit upside for Rogers even if execution stays on track.
The more cautious research frames Rogers as facing a tougher backdrop for sustaining its current profitability profile, which feeds into lower valuation multiples in their models.

What's in the News

Rogers is launching satellite-powered asset tracking technology with Geotab, using Rogers Satellite to give business customers near real-time visibility of critical assets beyond traditional cell coverage, including remote highways, rail corridors, and resource-focused regions across Canada (Key Developments).
The GO Anywhere Plus solution is designed to let existing IoT devices switch between the Rogers wireless network and low-earth orbit satellite service, aiming to keep sensors and trackers connected in areas where only a small share of Canada is currently covered by conventional wireless networks (Key Developments).
Rogers plans to introduce satellite-enabled GO Anywhere hardware this spring. This development could matter for investors watching adoption trends in sectors such as forestry, mining, and logistics where remote connectivity is important (Key Developments).
For full-year 2026, Rogers issued earnings guidance that includes expected total service revenue growth in a 3% to 5% range. This provides investors with a reference point for management’s current outlook on the business (Key Developments).

Valuation Changes

Fair Value: CA$59.75 to CA$59.10, a small trim of about 1.1%.
Discount Rate: 6.254% to 6.278%, a marginal increase that slightly lifts the required return in the model.
Revenue Growth: 2.53% to 2.36%, a modest reduction in the projected CA$ revenue growth rate.
Net Profit Margin: 10.39% to 10.08%, a small step down in the assumed profitability level.
Future P/E: 16.10x to 16.50x, indicating a slightly higher multiple applied to expected earnings.

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Key Takeaways

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 2.4% annually over the next 3 years.
Analysts assume that profit margins will shrink from 31.8% today to 10.1% in 3 years time.
Analysts expect earnings to reach CA$2.3 billion (and earnings per share of CA$4.37) by about April 2029, down from CA$6.9 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as CA$1.9 billion.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 16.5x on those 2029 earnings, up from 3.8x today. This future PE is greater than the current PE for the CA Wireless Telecom industry at 3.8x.
Analysts expect the number of shares outstanding to grow by 0.41% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.28%, as per the Simply Wall St company report.

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$59.1 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$74.0, and the most bearish reporting a price target of just CA$50.0.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be CA$23.3 billion, earnings will come to CA$2.3 billion, and it would be trading on a PE ratio of 16.5x, assuming you use a discount rate of 6.3%.
Given the current share price of CA$48.76, the analyst price target of CA$59.1 is 17.5% higher. Despite analysts expecting the underlying business to decline, they seem to believe it's more valuable than what the market thinks.
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.

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