Telus Corporation (T:CA) Valuation is Starting to Look Attractive to Investors

Telus is one of Canada’s largest telecommunications companies, and the company’s stock has recently attracted increased investor attention due to elevated trading activity and ongoing price volatility. Market sentiment has been pressured by intense competition in the telecom sector, higher interest rates, and concerns related to debt levels. In response, Telus has shifted its strategic focus toward improving free cash flow and strengthening its balance sheet.

Management has outlined a multi-year plan aimed at increasing free cash flow while gradually reducing leverage. As part of this strategy, the company has paused dividend growth in order to preserve capital and support debt reduction. While this decision disappointed some income-focused investors, Telus continues to offer a relatively high dividend yield compared with many Canadian large-cap stocks.

Beyond its core telecom operations, Telus is investing in digital health services, customer-experience technology, and artificial-intelligence-enabled solutions to diversify its revenue streams. The company also continues to invest heavily in fibre and 5G network infrastructure to support long-term subscriber growth and recurring revenue.

Stock Forecast 

Telus’s stock is currently producing a “Sell” signal, based on recent price trends and momentum indicators, which suggest the stock remains under short-term pressure. Shares are trading below key moving averages, indicating weakened momentum and limited near-term upside from a purely technical standpoint.

Analyst sentiment remains positive, with a consensus “Buy” rating on the stock, as analysts appear to be placing greater weight on Telus’s long-term fundamentals rather than short-term market fluctuations. The positive outlook reflects confidence in the company’s infrastructure assets, recurring revenue base, and management’s strategy to improve free cash flow and reduce leverage over time.

The current average price target of $22.00 per share, suggests significant upside from current trading levels. The gap between technical weakness and optimistic analyst forecasts highlights a disconnect between short-term market sentiment and longer-term valuation forecasts.  The divergence may suggests Telus may appeal more to long-term investors willing to tolerate near-term volatility, while short-term traders may wait for clearer technical confirmation before re-entering the stock.

Telus shares are trading below historical cash-flow multiples, reflecting both current challenges and potential upside if management executes successfully on its strategy. Key risks include ongoing pricing pressure in wireless services, slower-than-expected digital growth, and prolonged higher interest rates.