What Recent Gains and Cash Flow Growth Mean for TELUS Stock in 2025

Thinking about what to do with TELUS stock lately? You’re definitely not alone. Share prices have enjoyed a jump of more than 16% so far this year, signaling either a renewed sense of optimism or simply a reassessment of the risks in Canada’s reliable telecom sector. The last twelve months have seen a solid 13% total return, helping to make up for a rockier couple of years. Whether you’re holding for the dividend or debating getting in at current levels, the underlying question is the same: is TELUS fairly valued today?

On paper, TELUS doesn’t stand out as an "undervalued gem," but it may not be overpriced either. Our value score, based on six different valuation checks such as price-to-earnings and discounted cash flow, sits at 2 out of 6. In plain English, TELUS looks undervalued on just two of those metrics, and fully valued or even slightly expensive on the rest. However, the overall picture is more nuanced when you consider not just the raw numbers but also what is driving the recent surge in confidence and how TELUS’s fundamentals compare to those of other telecom peers.

Let’s explore each of the key ways analysts and investors assess TELUS’s valuation, and stay tuned until the end for a fresh perspective on how to determine what TELUS shares might be worth in your portfolio.

TELUS delivered 13.4% returns over the last year. See how this stacks up to the rest of the Telecom industry.

Approach 1: TELUS Cash Flows

The discounted cash flow (DCF) model is a popular technique for valuing stocks. It relies on estimates of the company’s future cash generations and discounts those amounts back to today’s value. This helps investors try to determine what a business is truly worth, independent from the market mood.

For TELUS, the latest available free cash flow (FCF) stands at CA$1.52 billion. Analysts project meaningful growth over the next decade, with free cash flow expected to reach CA$3.92 billion by 2035 based on a combination of consensus and extrapolated estimates. Running these projections through a two-stage DCF model yields an intrinsic value of CA$59.60 per share.

Compared to today’s market price, this implies that TELUS is trading at a 61.7% discount. This suggests it could be significantly undervalued from a cash flow perspective. If these projections hold, there may be notable upside for long-term investors willing to navigate the swings in the telecom sector.

Result: UNDERVALUED

Our DCF analysis suggests TELUS is undervalued by 61.7%. Track this in your watchlist or portfolio, or discover more undervalued stocks based on DCF analysis.

Approach 2: TELUS Price vs Earnings

The price-to-earnings (PE) ratio is a common valuation metric for profitable companies like TELUS because it shows what investors are willing to pay today for one dollar of current earnings. This metric translates complex financials into a single, easy-to-understand number, making it simpler to compare companies within an industry.

However, not all PE ratios are directly comparable. A “normal” or “fair” PE depends on several factors, including how quickly a company is expected to grow profits, the consistency of those earnings, and how risky the business is compared to peers. Companies with high, consistent growth and stable margins often have higher PE ratios, while more volatile or stagnant companies tend to trade at lower multiples.

Currently, TELUS trades at a PE of 36x, which is noticeably higher than the telecom industry average of 17x and above its closest peers at 25.7x. Simply Wall St’s proprietary Fair Ratio, which adjusts for TELUS’s growth outlook and other fundamentals, is 17.8x. The difference between TELUS’s current PE and its Fair Ratio suggests that, based on this metric alone, the stock appears to be trading at a significant premium to what would be expected for its profile.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your TELUS Narrative

Many investors limit themselves to crunching numbers, but a Narrative gives meaning to raw data by attaching a personal story or viewpoint about TELUS and connecting it directly to a realistic financial forecast and fair value estimate.

Think of a Narrative as your unique perspective on where TELUS is going. It weaves your beliefs about future revenue, earnings, and profit margins into one easily explained story, helping you understand not just the “what,” but also the “why” behind your investment decision.

On Simply Wall St, Narratives are an accessible, community-powered tool that let millions of users easily visualize and adjust forecasts, see fair value calculations update instantly, and compare their outlook with others in real time as fresh news or quarterly results come in.

With Narratives, you can make smarter buy or sell decisions by comparing your calculated Fair Value (based on your story) to today’s share price. As soon as new information emerges, your Narrative quickly adapts to reflect the current reality.

For example, some investors have a bullish TELUS Narrative with a fair value near CA$30 if they believe digital health and broadband expansion will drive rapid future earnings. Others may adopt a more cautious view, assigning a fair value closer to CA$20 because of competition and regulatory headwinds.

Do you think there's more to the story for TELUS? Create your own Narrative to let the Community know!

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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