U.S. financial giant J.P. Morgan kicked off research coverage of Canada’s three largest telecom stocks with a rosy view of their prospects.
Richard Choe, the lead analyst on a report to clients published Friday, said he sees the Canadian communications industry favourably, pointing in part to continued growth potential in the wireless sector where he suggested new entrant fears are “overblown.”
He noted shares of BCE Inc., Rogers Communications Inc. and Telus Corp. have been weak this year and trading at the lower end of their historical valuation ranges.
“We believe the stocks should rally significantly if the new entrant overhang is removed either if no large foreign telecom companies apply to bid in the 700-megahertz auction… or win any spectrum during the auction,” Mr. Choe said. “If a well-funded new entrant enters we see significant negative impact for all three carriers.”
The deposit deadline for next year’s auction of…
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