Telus enjoys tailwinds on wired but faces headwinds on wireless, says Euro Pacific

Telus CEO Darren Entwistle in Vancouver, October 2, 2015.

On Thursday, Telus will report its Q3, 2015 results. Goff expects the company will earn $0.65, with EBITDA of $1.11-billion on revenue of $3.19-billion, in-line with the street’s expectation of EPS of $0.65, EBITDA of $1.11-billion and revenue of $3.16-billion. The analyst believes that with twelve “Buy” ratings, eight “Holds” and no “Sells” it is likely that the street’s collective price targets will move ahead.

The analyst says that while he feels Telus is facing near-term headwinds in its wireless business, the company’s wired business is currently outperforming.

“Comparing to last year, the wireline subscribers’ growth for most of the providers are shrinking and we expect TELUS to keep a consistent growth rate and remain strong among the peers. TELUS stands out across its domestic peers for its relative subscriber performance. Investors will await Shaw’s introduction of the X1 platform and the 1 Gig services to see if it leads to significant share shifts. Thus far, competitor Shaw has not discussed 1 Gig coverage plans to the extent Rogers has in the east. We do not see Shaw offering the same comprehensive coverage within Rogers’ timeline (end of 2016). Thus, we see TELUS continuing to outperform BCE across wireline subscriber measures.

In a research update to clients today, Goff maintained his “Buy” rating and one-year price target of $48.00, implying a return of 12.7% at the time of publication.