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Why Is Rogers Communications Stock So Cheap?

Andrew Willis Sep 15, 2022

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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Andrew Willis

Senior Editor

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Andrew Willis is senior editor for Morningstar Canada, covering stocks, alternative assets, funds, and personal finance. He is the writer and host of two weekly stock features, including Morningstar's Stock of the Week.

Willis previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor. He has also written for Thomson Reuters and CNN.

Willis holds a bachelor's degree in business administration from Bishop's University and a master's degree in journalism from the University of Hong Kong. Follow him on Twitter @Andrew_M_Willis.

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