UBS Analyst Upgrades Telus to 'Buy' on Valuation

UBS analyst Jeffrey Fan remains bearish on Telus Corp. (TU), although he has bumped up his rating on the stock to "buy" from "neutral" on share price depreciation.

In a note to clients, Mr. Fan wrote:

News concerning fresh wireless entrants to the Canadian market and the potential Telus will build a next-generation HSPA network over its current CDMA one could weigh on shares in the short term.

He maintains his short-term "sell" rating on the stock.

Telus shares have lost a third of their value since peaking at a 52-week high of C$58.95 last September.

Mr. Fan also noted the company has a four-year track record of announcing dividend increases alongside its third-quarter results. He believes this trend will continue and projects a three-year dividend CAGR of 10% through 2011.