Rogers Communications (TSX:RCI.B) Lands Prime Video NHL Rights, Is The Stock Still A Bargain?
Rogers Communications (TSX:RCI.B) has moved into focus after announcing a 12-year agreement with Prime Video in Canada for exclusive Wednesday night national NHL broadcasts and select Stanley Cup Playoff series.
See our latest analysis for Rogers Communications.
For investors, the Prime Video deal lands at a time when Rogers Communications’ short term momentum is improving, with a 1 month share price return of 5.07% and a year to date share price decline of 6.95%, while the 1 year total shareholder return stands at 8.86%. This points to interest that has been supported more by dividends than by recent price gains.
If this kind of media and connectivity story has your attention, it can be useful to widen the lens and look at other companies benefiting from digital infrastructure trends through the 36 power grid technology and infrastructure stocks
Rogers Communications shares have started to recover, yet the long term NHL rights and recent Prime Video partnership are only just taking shape. Has most of the upside already played out, or is the market still cautious on valuation?
Most Popular Narrative: 19.7% Undervalued
Rogers Communications last closed at CA$48.49, while the most widely followed narrative anchors fair value at about CA$60.38, implying a meaningful valuation gap that rests on specific long term cash flow assumptions.
The continued deployment and expansion of 5G and Wi-Fi 7 infrastructure, along with the introduction of advanced services like fixed wireless internet and bundled offerings, allows Rogers to capitalize on increasing mobile data consumption and connected device proliferation, supporting both subscriber additions and higher margins in future periods.
It may be useful to explore what would need to occur in subscriber growth, margins, and future earnings for that valuation to be supported. The narrative spells out the full playbook.
Result: Fair Value of CA$60.38 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, investors still need to weigh regulatory pressure on pricing and access, along with high post acquisition debt. This could limit how fully this Rogers Communications narrative plays out.
Find out about the key risks to this Rogers Communications narrative.
Next Steps
If the Rogers Communications story so far feels mixed, consider that as a prompt to move quickly and test the data yourself. Start by weighing its 5 key rewards and 3 important warning signs
Looking for more Rogers Communications style investment ideas?
If you are serious about building a stronger portfolio around Rogers Communications and similar stories, now is the time to broaden your watchlist with fresh ideas.
- Spot potential value opportunities early by scanning companies that currently screen as 11 high quality undervalued stocks.
- Strengthen the income side of your portfolio by reviewing a focused set of 7 dividend fortresses that meet strict yield criteria.
- Prioritize resilience by zeroing in on companies highlighted in the 10 resilient stocks with low risk scores so short term volatility does not catch you off guard.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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