1-Star Price
PREMIUM
5-Star Price
PREMIUM
Stewardship
PREMIUM
BCE bounced back strongly from a second quarter that was severely depressed from COVID-19 lockdowns, with revenue and EBITDA both exceeding our estimates. Strong showings in wireless and a significant recovery in media were the primary factors in the outperformance. We expect the pandemic to continue to weigh on results for its duration, but in our view, BCE is well positioned long term and the stock is attractive relative to our CAD 65 fair value estimate.
BCE is both a wireless and Internet service provider, offering wireless, broadband, television, and landline phone services in Canada. It is one of the big three national wireless carriers, with its nearly 10 million customers constituting about 30% of the market. It is also the ILEC (incumbent local exchange carrier--the legacy telephone provider) throughout much of the eastern half of Canada, including in the most populous Canadian provinces--Ontario and Quebec. Additionally, BCE has a media segment, which holds television, radio, and digital media assets. BCE licenses the Canadian rights to movie channels including HBO, Showtime, and Starz. In 2019, the wireline segment accounted for just over half of total EBITDA, while wireless composed 38%, and media provided the remainder.
