Will BCE’s (TSX:BCE) Cost Cuts and Dividend Reduction Reshape Its Investment Narrative?

• Earlier in 2025, BCE implemented sizable workforce reductions and cut its dividend payout in half, with nearly 700 staff laid off and manager-level roles eliminated as part of a three-year debt leverage reduction plan amid industry pressures.
• These measures reflect BCE’s ongoing response to competitive and regulatory challenges in Canadian telecommunications, indicating its shift toward operational efficiency and more sustainable financial practices.
• We’ll examine how BCE’s recent cost-cutting and dividend reduction could reshape its investment outlook and future growth assumptions.

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BCE Investment Narrative Recap

To be a BCE shareholder today, you need to believe that the company’s cost reduction efforts, including the recent workforce cuts and dividend reduction, will help it stabilize free cash flow and adapt to mounting pressures in Canadian telecom. While these changes may support near-term financial flexibility, they do not fundamentally alter the primary catalysts, like the long-term expansion of BCE’s fiber network, or alleviate the most significant risk, namely regulatory intervention limiting broadband build-out. Among recent announcements, the decision to halve the dividend payout ratio is particularly relevant. This move is intended to bring the payout to a level that management considers more sustainable, directly impacting income-focused investors and highlighting the company’s focus on strengthening its balance sheet amid ongoing headwinds. Yet, for those focused on dividend stability, it’s important to remember that the risks surrounding BCE’s capital intensity and regulatory headwinds remain front and center...

Read the full narrative on BCE (it's free!)

BCE’s outlook anticipates CA$26.0 billion in revenue and CA$2.8 billion in earnings by 2028. This is based on a projected annual revenue growth rate of 2.2% and an earnings increase of CA$2.37 billion from current earnings of CA$433.0 million.

Uncover how BCE's forecasts yield a CA$36.41 fair value, a 12% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members submitted 14 fair value estimates for BCE, ranging from CA$27.25 to CA$969.71. While forecasts differ widely, regulatory caps on fiber expansion could directly shape the confidence behind these contrasting opinions.

Explore 14 other fair value estimates on BCE - why the stock might be worth 16% less than the current price!

Build Your Own BCE Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your BCE research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.
• Our free BCE research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate BCE's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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