BCE Earnings: Hostile Stance Toward Regulators and Poor Cash Flow Guidance Cause Concern

BCE reported a decent fourth quarter, and its 2024 sales and EBITDA guidance was consistent with recent trends. However, management stepped up its aggression against what it sees as overly intrusive regulations and used that backdrop to support a series of decisions to restructure its business. With multiple moving parts, management guided to a significant drop in free cash flow in 2024 and was reticent to say if there would be a bounceback in 2025. We’re reducing our fair value estimate to CAD 60 from CAD 65 due to the change in our cash flow expectations and greater long-term uncertainty.