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Why is Rogers Stock so Cheap?

The business has bounced back much faster than sentiment.

Andrew Willis 16 September, 2022 | 4:28AM
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Andrew Willis: It’s easy for the infamous “Rogers Outage of 2022” to overshadow strong fundamentals in the company, but we think investors should move on… because most of the customers eventually will.

After restoring services and recently reaching a deal with other major Canadian telecoms to ensure at least some services are still available in the event of future outages, Rogers Communications (RCI.B) is trading at a significant discount. All while the company posts strong performance quarter after quarter.

Equity analyst Matthew Dolgin notes that the payout in customer credits and preventative work related to the outage will cost about 400 million… which doesn’t move the needle on the company’s valuation when it already has three billion in capital spending annually. And for all the customers that still leave after that payout, we predict between three-and-four-hundred thousand new subscribers every year.

From Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Rogers Communications Inc Shs -B- Non-Voting53.88 CAD-1.21Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. He previously produced content for Fidelity Investments and finance events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @AndrewWillisCDN.

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