Analyst Ratings Coverage
On Friday August 4, 2023, there were two notable updates on BCE’s stock. Both TD Securities and Scotia Capital issued new research reports after the communications company reported its quarterly earnings.
Scotia Capital (Analyst Rank #9 out of #346) downgraded its target price for the company’s stock. A target price is an analyst’s estimate of a stock’s fair value, and a downgrade suggests that the company’s outlook or performance may not be as favorable as previously anticipated. This downgrade might have been influenced by a variety of factors, such as changes in the company’s financials, industry dynamics, or macroeconomic conditions. The downgrade may signal a potential decrease in the stock’s price or a less positive outlook in the short to medium term.
TD Securities, (Analyst Rank #12 of #346) upgraded its rating for the company’s stock from its previous recommendation. An upgrade typically suggests that TD Securities has become more optimistic about the company’s prospects and sees potential for its stock to perform better than before. The upgrade may be driven by positive developments within the company, strong financial performance, favorable industry trends, or other factors that have increased confidence in the company’s future growth and profitability. This positive rating could attract more investor interest and potentially lead to increased demand for the stock.
Earnings Results
BCE Inc reported its earnings results with several notable highlights and challenges. Here is a summary of the key points:
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- Total wireless mobile phone and mobile connected device, retail Internet, and IPTV net activations increased by an impressive 76.5%.
- Consolidated revenue grew by 3.5%, leading to a 2.1% rise in adjusted EBITDA.
- Net earnings were $397 million, showing a decline of 39.3%. Net earnings attributable to common shareholders stood at $329 million, or $0.37 per common share, down 44.8%. Adjusted net earnings were $722 million, resulting in a 9.2% decrease in adjusted EPS to $0.79.
- Cash flows from operating activities dropped by 8.9% to $2,365 million. Free cash flow also decreased, reaching $1,016 million, mainly due to timing issues related to working capital and capital expenditures.
- The wireless segment demonstrated strong momentum, surpassing 10 million mobile phone subscribers. Wireless service revenue grew by 4.4%, driven by the highest Q2 postpaid net activations in 18 years, up 33.8% to 111,282, and 79,537 mobile connected device net activations, up 79,881.
- BCE experienced its best Q2 retail Internet net activations since 2007, showing a 10.2% increase to 24,934. Fiber net activations were also robust, rising by 38.2% to 52,148, contributing to a strong 7% growth in residential Internet revenue. The company is on track to complete 85% of its planned broadband buildout program by the end of 2023.
- Bell Media’s digital revenue saw a notable 20% increase. However, total media revenue and adjusted EBITDA declined by 1.9% and 5.3%, respectively, due to the ongoing advertising recession.
- Despite the challenges and declines in certain segments, BCE remains confident in its financial performance and reconfirmed all 2023 financial guidance targets.
BCE stock Forecast & Analysis
Based on the analysis of 9 analysts, the average target price for BCE Inc over the next 12 months is estimated to be CAD 64.77. This forecast suggests a potential upside in the stock’s price compared to its current value.
The average analyst rating for BCE Inc is a “Buy,” indicating that a majority of the analysts covering the stock have a positive outlook and recommend buying the stock.
Stock Target Advisor’s analysis has assigned a “Neutral” rating to BCE Inc. This neutral rating is based on 7 positive signals and 8 negative signals identified by their analysis. These signals may include various technical, fundamental, and sentiment indicators that are used to assess the stock’s potential performance.
As of the last closing, BCE Inc’s stock price was CAD 55.52. Over the past week, the stock price has experienced a decline of -2.77%, while over the past month, it has dropped by -8.08%. Looking at the performance over the last year, the stock price has seen a decrease of -12.76%.
STA Research (StockTargetAdvisor.com) is a independent Investment Research company that specializes in stock forecasting and analysis with integrated AI, based on our platform stocktargetadvisor.com, EST 2007.
