Cogeco Communications (CGEAF – Research Report), the Communication Services sector company, was revisited by a Wall Street analyst yesterday. Analyst Tim Casey from BMO Capital maintained a Hold rating on the stock and has a C$80.00 price target.
Tim Casey’s rating is based on a combination of factors that reflect both the strengths and challenges facing Cogeco Communications. The company’s recent financial performance showed a slight revenue increase and a notable EBITDA beat, largely due to favorable foreign exchange rates. However, subscriber metrics fell short of expectations, and the company’s flat EBITDA forecast for the second half of fiscal 2025 suggests limited immediate growth potential.
Additionally, while Cogeco is poised to launch its Canadian wireless service, which could expand its market reach, the competitive pressures in both the Canadian and U.S. markets remain significant. The company’s strategic initiatives, such as potential network pruning and a focus on free cash flow growth, indicate a cautious approach to navigating these challenges. These mixed signals, alongside management’s maintained guidance and the current market dynamics, contribute to the Hold rating, suggesting that the stock is expected to perform in line with the market without significant outperformance.
In another report released yesterday, Scotiabank also maintained a Hold rating on the stock with a C$75.50 price target.