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Telus' 2026 Guidance Cut Weakens Near-Term Investment Case, RBC Capital Markets Says

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Telus' (TU) larger-than-expected reduction to its 2026 guidance weakened the stock's near-term investment case, RBC Capital Markets said in a note Tuesday.

The investment firm cited a slower growth outlook, reduced financial visibility, persistent "restructuring charges," delayed free-cash-flow improvement and weaker-than-expected adjusted earnings before interest, taxes, depreciation, and amortization guidance for Telus Technology Solutions.

RBC said it is complicated to identify a bottom for the shares because of Telus' premium valuation relative to competitors, challenging market conditions, uncertainty over asset sales, and lack of a clear near-term catalyst, according to the report.

Longer term, the firm said it remains positive on Telus' core telecom assets and expects the new management team to simplify the business, reduce costs, streamline asset mix, and improve capital returns.

RBC downgraded Telus to sector perform from outperform, and cut the price target to 15 Canadian dollars ($10.66) from CA$20.

Shares of Telus were down 3.8% in Tuesday trading.

Price: $9.23, Change: $-0.36, Percent Change: -3.75%

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