"The next big catalyst for cable stocks will come when operating/capex pressure abates and free cash flow expands significantly in the next 1-2 years," he wrote in a note to clients.
Cogeco's operations in Portugal may be hurt somewhat by the strong Canadian dollar in future quarters, Mr. Allen wrote, but the company's strong Canadian business should offset those issues. Mr. Allen has an "outperform" rating on Cogeco with a 12-month price target of C$49.
Shaw, meanwhile, could post surprisingly strong additions in cable telephony customers. Mr. Allen also rates Shaw "outperform" with a price target of C$51.