Q: Hi, Thanks for sharing your recent views on Telus, based on the T/TIXT, reduced guidance. In your opinion, and based on recent commentary, how long it might take for TIXT to overcome the pressure on its revenues/profits and in turn, stop being a drag on its parent Telus ? The issue is that even if Telus continues to report great numbers for its core business, TIXT pressure will likely keep a lid on share price of Telus and dividend alone will not be enough to cover it.
Considering the opportunity cost of the capital for this time period, we would like to offload full or at least half of our position, over next few days, in 2/3 tranches.
Based on the technicals/charts, what is the price range, you would use to liquidate ?
Thank You
Considering the opportunity cost of the capital for this time period, we would like to offload full or at least half of our position, over next few days, in 2/3 tranches.
Based on the technicals/charts, what is the price range, you would use to liquidate ?
Thank You
5i Research Answer:
TIXT will probably be in the penalty box for at least a few quarters, likely into 2024, barring a sharp reversal. Investors are not happy and will adjust valuation accordingly. But T is $34 billion market cap, and TIXT is now just $3.5B. Yes it is a drag on results but not overly significant anymore in terms of T asset exposure. Its equity interest now is well less than 5% of its market cap. T continues to be hit in the market, though, and we think $23.75 would be an exit price for those wanting out.