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TELUS (TSX:T) Resets Its Dividend And Leverage Plan, Is The Stock Still Undervalued?

Simply Wall St · 1d ago

Attention has shifted back to TELUS (TSX:T) after its 2026 reset, which includes a 55% dividend cut and a push toward lower leverage, as investors reassess the telecom's long term financial priorities.

Recent attention on TELUS comes against a weak share price backdrop, with the stock down 33.57% on a year to date share price return and the 1 year total shareholder return declining 41.02%. This signals fading momentum despite a 3.28% one day share price gain and ongoing restructuring headlines.

Scan how TELUS's reset compares with other telecoms and cash flow focused plays by reviewing the hand-picked 7 high quality undervalued stocks now on investors' radar.

TELUS now trades at a steep discount to both analyst targets and some intrinsic value estimates after its reset and dividend cut. Is that gap mispricing caution, or is it a fair reflection of the risks still on the table?

Most Popular Narrative: 16% Undervalued

The most followed view on TELUS sees a fair value of about CA$14.31 per share versus the recent CA$11.95 close. This frames the current discount as a bet on execution in newer businesses and margin repair.

Deployment and commercialization of next-generation technologies, including AI-powered customer experience platforms, data center assets for "sovereign AI" infrastructure, and private 5G, position TELUS to create new revenue streams, lower cost-to-serve, and enhance its competitive moat, translating into higher future earnings and margin improvements.

See why 190 investors see TELUS as 16% undervalued.

The narrative rests on a discount rate of 7.45%, which analysts use to bring those future cash flows and earnings assumptions back to today and arrive at the CA$14.31 fair value estimate.

On that framework, TELUS trades at roughly a 16.5% discount to this implied worth. The gap is driven by questions over impairments, heavy capital needs, and how well the health and digital segments can offset slower traditional telecom growth.

Result: Fair Value of CA$14.31 (UNDERVALUED)

Still, the recent CA$2.135b impairment charges and high ongoing fibre and 5G investment leave TELUS exposed if cash generation or regulatory outcomes disappoint.

Find out about the key risks to this TELUS narrative.

Next Steps

Mixed feelings about TELUS after the reset are understandable. Move quickly, review the data, and weigh both sides through the 3 key rewards and 2 important warning signs.

Looking for more investment ideas beyond TELUS?

If TELUS feels interesting but not enough on its own, broaden your watchlist with a few targeted stock ideas sourced directly from the Simply Wall Street Screener.

  • Jump on potential deep value situations before the crowd by scanning the 7 high quality undervalued stocks that currently screen well on both quality and pricing.
  • Strengthen the income side of your portfolio by reviewing the 1 dividend fortresses that pair higher yields with supporting fundamentals.
  • Dial down portfolio stress and focus on resilience by checking the 8 resilient stocks with low risk scores that clear the bar on Simply Wall Street's risk filters.

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.