Why TD Securities Likes Rogers Communications

 |  About: Rogers Communications Inc. (RCI)
by: Market Blog

By Simon Avery

We are entering reporting season for Canada’s telecom and cable companies beginning next week.

Vince Valentini, an analyst with TD Securities, has released a report on Rogers Communications (NYSE:RCI) today. He says he expects the country’s biggest wireless operator to announce a dividend increase in the neighbourhood of 20% and a renewed share buyback program.

Street estimates have increased since November, but we continue to believe that Rogers will put up financial results that exceed consensus. We also believe that subscriber results will stack up fine versus the modest expectations on the street,” he writes.

Mr. Valentini said it’s unlikely that new competition in the form of Globalive Wireless’ Wind service that launched recently will have any significant impact on Rogers’ fourth quarter results. In addition, he says it’s possible that somewhere around Feb. 17 investors who sold the shares short will be scrambling to cover their positions.

Most recent fillings available indicate that the short position in Rogers stock has increased to about 35 million shares, versus 29 million on Nov. 18.

Mr. Valentini maintains a “buy” rating on the stock and target price of $40. It is trading this morning at $32.63.