The lack of new large orders at Lion Electric worries analysts at Laurentian Bank Securities. (Image: courtesy)
What to do with Telus, Guru and Electric Lion titles? Here are some analyst recommendations that prices are likely to move in the near future. Note: The author may have a completely different opinion than the one expressed.
Telus (T, $28.35): Telus Health subsidiary strengthened by acquisition of LifeWorks
Telecommunications service provider Telus announced it has acquired LifeWorks, a company providing virtual and face-to-face solutions that improve the overall well-being of its customers, for an amount of US$2.9 billion, including US$600 million dollar debt burden.
The acquisition, priced at $33 per share, is positively viewed by National Bank Financial analyst Adam Shine, who says the transaction has been approved by the courts, shareholders of LifeWorks (LWRK, $30.28), the Toronto Stock Exchange, the New York Stock Exchange and regulators.
The analyst recalls that in 2021, LifeWorks had revenues of $1.02 billion and earnings before interest, taxes, and amortization (EBITDA) of $194.8 million (M$), according to calls, at a Price of $50 million by 2024,” he says.
Adam Shine believes the rationale behind the acquisition is to fuel Telus Health’s growth as it becomes a provider of resources to help employers meet the evolving health and wellness needs of employees and their families. “Furthermore, LifeWorks enables Telus Health to add the Employee and Family Assistance Programs (EFAP) platform to its suite of healthcare technologies,” he says.
The analyst adds that Telus Health’s customer base will grow to more than 50 million people upon closing of the transaction, which is expected to take place in the fourth quarter of 2022. The company currently has 22 million users. “Telus Health is increasingly becoming an all-in-one solution in the health technology world. In addition to expansion opportunities in Canada and the United States, the company also sees growth opportunities in the UK, Europe and Australia,” he says.
For now, the analyst maintains his recommendation of an “outperform” for the stock Telus and his 1-year price target of $36.
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