Watch: Cogeco, TD Bank and Goodfood

Citing delays in approving purchase of First Horizon Corp. (FHN, $21.56) by TD Bank, US analyst lowers target price to $93 from $97. (Photo: 123RF)

What to do with Cogeco, TD Bank and Goodfood stocks? 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.

Cogeco Communications (CCA, $86.62): Disappointing subscribers on both sides of the border

In a much more challenging environment, the cable company’s third-quarter financial performance was satisfactory, said Canaccord Genuity’s Aravinda Galappatthige. On the other hand, the analyst does not hide his disappointment with the number of subscribers to Internet services on both sides of the border.

Cogeco added 1,700 Internet subscribers in Canada instead of the planned 3,800. A year earlier, the company had added 4,600 subscribers. The company is also losing cable and phone service customers.

In the United States, broadband service Breezeline lost 1,700 Internet subscribers while it had forecast an increase of 7,500. The analyst believes the company faces increased competition from fixed wireless broadband services.

Here, too, the company is losing cable customers.

Cogeco attributes the decline to post-pandemic changes in homeworking habits, higher churn and increased competition.

Despite everything, Cogeco is reporting third-quarter results in line with expectations, with internal increases of 3.8% in revenue and 5.7% in operating income excluding the impact of the Ohio acquisition, while guidance for 2023 is slightly lower than forecast .

Next year, the company expects sales to increase by 2% to 4% and operating income to increase by 1.5% to 3.5%. On the downside, free cash flow will fall by 2% to 12% despite lower-than-expected capex.

Aravinda Galappatthige hopes to learn more about competition from telecommunications companies in the United States and the impact of the economic downturn on customer acquisition.

Inflation is another factor to watch. If the overall price increase allows Cogeco to increase the levels of its services, it may cause some customers to opt out and also increase the company’s costs.

Despite the unexpected drop in the number of subscribers to the American Internet service, the analyst is not touching his target price of $120 and his buy rating.

TD Bank (TD, $79.84): U.S. purchase of First Horizon still under regulators’ sights

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