Telus Reports a Good Q2, Though Telecom Revenue Growth Failed to Keep Up With Peers

Telus had a good second quarter, and the firm is tracking our full-year projections. Its wireless business was not as strong as Rogers or BCE’s on any metric, though some of the lag in average revenue per user growth stems from Telus’ wireless ARPU holding up better during the pandemic. The fixed-line business again led the industry. Revenue streams outside traditional telecom continue to power Telus’ relatively high total sales growth (7% year over year) and are not pressuring margins. Relative to our unchanged CAD 32 fair value estimate, we believe Telus is modestly undervalued. As with the other major Canadian telecom companies, we think its stock is worth buying at any material discount.