TELUS Corporation’s stock reached a new 52-week low on November 7, 2023, trading as low as $12.87. The shares closed that day at $12.8750 after a trading volume of approximately 4,591,491 shares, down from a previous close of $13.15. This decline has prompted discussions among analysts regarding the stock’s future performance.
Analysts Adjust Price Targets
Several financial institutions have influenced market sentiment surrounding TELUS. On November 25, National Bank of Canada upgraded its rating for TELUS from “hold” to “strong-buy.” Conversely, JPMorgan Chase & Co. reaffirmed an “underweight” rating, reducing its price target from $22.00 to $19.00 in a report dated November 18.
Other firms have also revised their outlooks. National Bank Financial raised its rating to “outperform” on November 19, while Barclays lowered its target price from $15.00 to $14.00, maintaining an “equal weight” stance. Overall, TELUS has received a mix of ratings: one analyst has classified it as a “strong buy,” two have given it a “buy” rating, seven have recommended holding, and one analyst has suggested selling. The average rating across analysts is currently “hold,” with a mean price target of $18.17, according to MarketBeat.com.
Quarterly Earnings Miss Expectations
On the same day as the stock’s decline, TELUS announced its quarterly earnings results. The company reported earnings per share (EPS) of $0.17, falling short of the consensus estimate of $0.19 by $0.02. TELUS recorded a net margin of 5.71% and a return on equity of 8.76%. Revenue for the quarter reached $3.67 billion, below the expected $3.77 billion. Compared to the previous year, revenue increased by a modest 0.1%, while EPS for the same period last year was $0.28.
Looking ahead, sell-side analysts forecast TELUS will report an EPS of $0.71 for the current fiscal year.
Dividend Increase Announced
In a positive development, TELUS also disclosed an increase in its quarterly dividend. Shareholders of record as of December 11, 2023, will receive a dividend payment of $0.4184 per share on January 2, 2024. This marks an increase from the previous quarterly dividend of $0.30, resulting in an annualized dividend of $1.67 and a yield of 13.1%. It is noteworthy that TELUS’s payout ratio stands at 216.36%, indicating a significant commitment to returning value to shareholders despite current stock performance challenges.
Institutional Investment Trends
Recent changes in institutional holdings reflect a varied approach to TELUS stock. First Affirmative Financial Network raised its stake by 4.5% in the third quarter, now holding 40,927 shares valued at $645,000. Morningstar Investment Management LLC entered a new position worth $5,030,000, while CANADA LIFE ASSURANCE Co increased its stake by 4.8%, owning 560,219 shares valued at $8,797,000.
Additional investments were made by PDT Partners LLC, which raised its holdings by 4.5%, and XTX Topco Ltd, which significantly increased its position by 84.7% during the same period. Currently, institutional investors hold 49.40% of TELUS’s stock, indicating a substantial level of confidence in the company despite the recent stock price fluctuations.
TELUS Corporation continues to navigate a challenging market environment while balancing shareholder returns with performance expectations. Stakeholders and analysts alike will be closely monitoring the company’s upcoming strategies and financial disclosures as they unfold.
