Canaccord less bearish on Canadian Telecom, upgrades BCE to Buy

Canaccord analyst Aravinda Galappatthige upgraded BCE to Buy from Hold with a price target of C$54, down from C$56. The firm sees a strengthening case to shift from its previously bearish stance on Canadian Telecom due to signs of more manageable competitive conditions. While the firm recognizes there will likely be an upswing in competitive intensity at some point when Videotron “steps up its efforts to more forcefully attack the national wireless opportunity,” evidence suggests this “does not have to be a near-term event,” the analyst tells investors. In addition to citing a high payout ratio in the near term at BCE, the firm says it remains “comfortable” around the sustainability of the dividend and believes the board is likely to continue its practice of annual growth to the dividend in February.