On January 10, we maintained our Neutral recommendation on
) based on its unparalleled asset base along with a broad
collection of product offerings. The stock holds a Zacks Rank #3
(Hold), which further supports our view.
Why the Reiteration?
We expect the Canadian communications service provider BCE to
benefit from higher wireless revenue, improving wireline revenue,
growing contribution from media business and cost reduction
methods. The company is enhancing its wireline and wireless video
capabilities with significant new investments in broadband
networks, which are expected to generate higher revenue per user
and attract new customers.
The company's Bell Media segment is also performing better than
expected with the rapid growth in video usage and the media
advertising demand. Further, acquisitions will continue to play
an important role in boosting BCE's overall portfolio. We also
appreciate the company's commitment to return value to its
shareholders in the form of increased dividend and share
Despite these positive aspects, we remain on the sidelines as
failure on the company's part to achieve its targets will
adversely affect its revenue and earnings. Moreover, stiff
competition from national carriers, regulatory issues and
continued decline in network access services keep us cautious on
We witnessed no earnings momentum over the last 30 days. The
Zacks Consensus Estimates for the fourth quarter and full year
2012 are currently pegged at 68 cents and $3.21 per share,
respectively. This reflects year-over-year increase of 7.4% and
1.8% for the quarter and full year.
Other Stocks to Consider
Other stocks, within the diversified commutations service
segment, worth considering are
Hawaiian Telcom Holdco Inc
Shenandoah Telecommunications Co.
). Both of them carry Zacks Rank #2 (Buy).
BCE INC (BCE): Free Stock Analysis Report
HAWAIIAN TELCOM (HCOM): Free Stock Analysis
SHENANDOAH TELE (SHEN): Free Stock Analysis
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