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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

Telus’ Strong Q3 Results Are the Latest Indication a Canadian Telecom Recovery Is Well Underway

Matthew Dolgin, CFA Equity Analyst

Analyst Note

| Matthew Dolgin, CFA |

Like its major peers Rogers and BCE, Telus reported very strong wireless results in the third quarter, marking a distinct turn for a business that was hit hard by the pandemic. Telus also continued to post impressive fixed-line results, which is the key reason it has been one of the Canadian telcos we’ve favored. While the fiber buildouts of phone companies Telus and BCE have led to share gains in their respective regions, something we expect to continue, their stocks aren’t as attractive as Rogers’, in our view, which has recently dropped for reasons we see as independent of future operating performance. Telus’ strong performance is in line with our expectations, and we are raising our fair value estimate to CAD 31 from CAD 29.

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Company Profile

Business Description

Telus is one of the big three wireless service providers in Canada, with its 9 million mobile phone subscribers nationwide constituting about 30% of the total market. It is also the ILEC (incumbent local exchange carrier; the legacy telephone provider) in the western Canadian provinces of British Columbia and Alberta, where it provides Internet, television, and landline phone services. It also has a small wireline presence in eastern Quebec. In recent years Telus has moved to bring fiber to the home over most of its wireline footprint as it upgrades its legacy copper network, leaving it able to compete on more equal footing with cable providers. Telus' other businesses participate in the international business services, health, security, and agriculture industries.

Contact
510 West Georgia Street, 23rd Floor
Vancouver, BC, V6B 0M3, Canada
T +1 604 697-8044
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 78,100

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