Telus (T) AI Stock Analysis

• Market Cap: $31.37B
• Dividend Yield: 7.57%
• Average Volume (3M): 4.50M
• Price to Earnings (P/E): 31.1
• Beta (1Y): 0.38
• Revenue Growth: 0.67%
• EPS Growth: 15.00%
• Country: CA
• Employees: 106,800
• Sector: Communication Services
• Sector Strength: 81
• Industry: Telecommunications Services
• EPS (TTM): 0.25
• Shares Outstanding: 1,514,159,700
• 10 Day Avg. Volume: 2,490,875
• 30 Day Avg. Volume: 4,499,903
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $22.40
• Price Target Upside: 8.13% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

Telus's strong financial performance, driven by consistent revenue growth and robust cash flow generation, underpins its stock score. While high leverage poses some risk, strategic initiatives in customer growth and sector expansion mitigate this. Technical analysis and valuation suggest caution, but positive corporate events and earnings call guidance support a stable outlook.

Positive Factors

Asset Monetization

TELUS' divestiture plan includes asset sales proceeds that could amount to over $1B, showing proactive measures to strengthen financial health.

Financial Discipline

TELUS is serious about achieving its de-leveraging target of 3x net debt/LTM EBITDA by 2027, providing evidence of financial discipline and focus on balance sheet strength.

Negative Factors

Leverage Challenges

TELUS faces several challenges, including unsustainable leverage and a dividend greater than its free cash flow.

Market Sentiment

The nearly 2-year long sell off in Canadian telecom stocks indicates past challenges that could impact market sentiment.

Telus Business Overview & Revenue Model

Company Description

Telus Corporation is a Canadian national telecommunications company that provides a wide range of telecommunications products and services, including wireless and wireline voice and data services. It operates primarily in the telecommunications sector and offers services such as mobile network services, internet access, voice, entertainment, healthcare, video, and IPTV television. Telus also focuses on providing innovative solutions in healthcare technology and digital health services.

How the Company Makes Money

Telus makes money through a variety of revenue streams primarily focused on telecommunications services. Its key revenue streams include mobile network services, where the company earns revenue from providing voice and data services to individual and business customers. This includes postpaid and prepaid plans, as well as additional services like roaming and equipment sales. Wireline services also contribute significantly, with Telus offering internet, television, and home phone services. Telus Health is another area of growth, generating revenue through digital healthcare solutions and technology services for healthcare providers and patients. The company also benefits from strategic partnerships and collaborations, which can enhance service offerings and customer reach.

Telus Financial Statement Overview

Summary

Telus demonstrates a solid financial position with consistent revenue growth and strong cash flow generation. Despite an increase in leverage, the company maintains effective cost management, resulting in stable gross profit margins. The improvements in free cash flow and cash conversion efficiency further strengthen its financial health. The company should continue to monitor its debt levels to mitigate potential risks.

Income Statement

Telus has demonstrated a consistent growth trajectory in revenue, increasing from CAD 14,589 million in 2019 to CAD 20,139 million in 2024. The gross profit margin remained strong at approximately 62% in 2024, indicating effective cost management. The net profit margin has improved from 5.8% in 2023 to 4.9% in 2024, which shows a positive trend in profitability. However, the EBIT margin has shown some volatility, decreasing from 16.3% in 2019 to 13.9% in 2023, before recovering slightly to 13.9% in 2024.

Balance Sheet

The company maintains a solid equity base with stockholders' equity at CAD 15,620 million in 2024, although it has slightly decreased from CAD 16,112 million in 2023. The debt-to-equity ratio has increased from 1.70 in 2019 to 1.91 in 2024, indicating higher leverage, which could pose risks if not managed carefully. However, the equity ratio remains stable at around 27%.

Cash Flow

Telus shows strong cash flow generation, with operating cash flow increasing from CAD 3,927 million in 2019 to CAD 4,847 million in 2024. The free cash flow has also improved significantly from negative CAD 928 million in 2021 to CAD 1,460 million in 2024. The operating cash flow to net income ratio is robust, indicating good cash conversion efficiency.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
20.14B	20.00B	18.29B	16.84B	15.34B
	Gross Profit
12.50B	12.47B	11.19B	10.14B	9.07B
	EBIT
2.80B	2.36B	2.95B	3.07B	2.48B
	EBITDA
6.68B	6.31B	6.94B	5.90B	5.63B
	Net Income Common Stockholders
993.00M	841.00M	1.61B	1.66B	1.21B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
869.00M	864.00M	974.00M	723.00M	848.00M
	Total Assets
58.02B	56.14B	54.05B	47.99B	43.33B
	Total Debt
29.78B	27.45B	25.14B	20.97B	20.39B
	Net Debt
29.78B	26.59B	24.17B	20.24B	19.54B
	Total Liabilities
41.23B	38.83B	36.39B	31.93B	30.73B
	Stockholders Equity
15.62B	16.11B	16.57B	15.12B	12.07B
Cash Flow		Free Cash Flow
1.46B	1.29B	1.16B	-928.00M	1.75B
	Operating Cash Flow
4.85B	4.50B	4.81B	4.39B	4.57B
	Investing Cash Flow
-3.70B	-4.75B	-5.41B	-5.47B	-6.17B
	Financing Cash Flow
-1.14B	139.00M	848.00M	953.00M	1.90B

Telus Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 20.72
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:T, the sentiment is Neutral. The current price of 20.72 is above the 20-day moving average (MA) of 20.63, below the 50-day MA of 21.02, and below the 200-day MA of 20.90, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 51.52 is Neutral, neither overbought nor oversold. The STOCH value of 49.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:T.

Telus Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QBR.B	79 Outperform	$8.59B	11.62	38.85%	3.49%	3.76%	14.27%
T	74 Outperform	$31.37B	31.05	6.26%	7.57%	0.67%	15.00%
CGO	66 Neutral	C$606.24M	6.94	10.38%	5.76%	0.06%	115.11%
Sector *	59 Neutral	$13.76B	7.70	-1.87%	3.86%	2.21%	-37.55%
BCE	57 Neutral	$27.29B	165.64	1.80%	13.37%	-1.07%	-92.15%

Telus Corporate Events

TELUS Launches $1.6 Billion Junior Subordinated Note Offering

TELUS has announced the pricing of $1.6 billion in fixed-to-fixed rate junior subordinated notes through a syndicate of agents. These notes, issued in two series with a 30.25-year maturity, are intended to help the company repay outstanding debts and support general corporate purposes. The Series CAR notes have an initial yield of 6.25% and the Series CAS notes have an initial yield of 6.75%, with both series having mechanisms to reset interest rates every five years. The issuance of these notes is expected to enhance TELUS’s financial flexibility and strengthen its market position.

Spark’s Take on TSE:T Stock

According to Spark, TipRanks’ AI Analyst, TSE:T is a Neutral.

Telus’s overall score reflects a strong financial performance and positive corporate events, offset by technical weaknesses and a high valuation. The company is poised for long-term growth with strategic initiatives, but near-term technical metrics and valuation concerns may pose challenges.

To see Spark’s full report on TSE:T stock, click here.

TELUS Considers Strategic Sale of Wireless Tower Stake to Boost Financial Flexibility

TELUS is exploring the sale of a minority stake in its wireless tower infrastructure to enhance network operations and strengthen its balance sheet. This move aims to provide financial flexibility, allowing TELUS to pay down debt and achieve a leverage target by 2027, while maintaining its commitment to sustainable growth and stakeholder value.

Telus Achieves Strong Growth in Q4 2024, Sets Positive 2025 Targets

Telus reported strong operational and financial results for the fourth quarter of 2024, with a notable increase in customer growth and financial metrics. The company added 328,000 mobile and fixed customers in the quarter, driven by demand for their bundled services. They observed a 4.1% rise in TTech operating revenues and a 7.0% growth in adjusted EBITDA, attributed to efficiency improvements and real estate and copper monetization. For the full year, Telus saw a consistent rise in revenues and free cash flow, targeting further growth in 2025 to strengthen their balance sheet and continue their dividend growth program.