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Rogers Communications Inc Class B RCI

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Rogers’ Recovery Largely Stalls in Q2 as Normalcy in Canada Is Slow to Return

Matthew Dolgin, CFA Equity Analyst

Analyst Note

| Matthew Dolgin, CFA |

With Canada behind the United States in re-opening its economy during the second quarter, Rogers’ financial performance stagnated. We were disappointed in its wireless and cable revenue growth relative to last year’s second quarter, which took place at the height of lockdowns. The media segment unsurprisingly saw a dramatic improvement with the return of sports compared with the same period last year, but costs ballooned. In all, we think the recovery in Rogers’ stock has gotten ahead of its business improvement, and we no longer see it as undervalued. We are maintaining our CAD 67 fair value estimate.

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Company Profile

Business Description

Rogers is the largest wireless service provider in Canada, with its more than 10 million subscribers equating to one third of the total Canadian market. Rogers' wireless business accounted for over 60% of the company's total sales in 2020 and has increasingly provided a bigger portion of total company sales over the last several years. Rogers' cable segment, which provides about one fourth of total sales, offers home Internet, television, and landline phone service to consumers and businesses. Remaining sales come from Rogers' media unit, which owns and operates various television and radio stations and the Toronto Blue Jays. Rogers' significant exposure to sports also includes ownership stakes in the Toronto Maple Leafs, Raptors, FC, and Argonauts.

Contact
333 Bloor Street East, 10th Floor
Toronto, ON, M4W 1G9, Canada
T +1 416 935-7777
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 25,300

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