Citigroup Analysts See Brighter Future for Telus than Bell

6:05 am on January 2, 2006 | Category: Business, Corporate, Telecom Services, Telephone, Wireless

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Citigroup has recently released reports on Canada’s two largest telephone companies, and seems to believe that Telus has a clear advantage over Bell.

Two experienced analysts from Citigroup have said that Telus has higher growth potential, largely due to the fact that 42% of its revenue is coming from wireless services. Bell depends much more heavily on the stagnant landline phone market, with just 16% of its revenue coming from wireless.

The fact that Canada’s penetration rate for mobile phones is only 52% (as opposed to almost 70% in the US), the analysts believe that Telus has a better foothold for capturing the remaining share of the wireless market.

“Our bullish view of Telus and our forecasts for the company to exceed recently announced company guidance and consensus for EPS [earnings per share] is driven by our expectations for Telus to grow its wireless business,” the Citigroup analysts wrote.

Telus received an overall rating of “buy” with a stock price target of $54. Bell, on the other hand was assigned a “hold” rating with a price target of $31.

Shares in Telus and Bell are currently worth $47.86 and $27.87, respectively.

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    Published by TeleClick Enterprises
    Edited by Jeremy Maddock