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Why Is Rogers Communications Stock So Cheap?

Why Is Rogers Communications Stock So Cheap?

Andrew Willis:

It’s easy for the infamous “

” to overshadow strong fundamentals in the company, but we think investors should move on… because most of the customers eventually will.

After restoring services and recently reaching a deal with other major Canadian telecoms to ensure at least some services are still available in the event of future outages, Rogers Communications is trading at a significant discount. All while the company posts strong performance quarter after quarter.

Equity analyst Matthew Dolgin notes that the payout in customer credits and preventative work related to the outage will cost about CAD 400 million, which doesn’t move the needle on the company’s valuation when it already has CAD 3 billion in capital spending annually. And for all the customers that still leave after that payout, we predict between 300,000 and 400,000 new subscribers every year.

From Morningstar, I’m Andrew Willis.

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