TU Should I Buy
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Telus Corporation (TU) is not a strong buy at the moment for a beginner investor with a long-term strategy. The stock is facing multiple headwinds, including bearish technical indicators, negative analyst sentiment, and declining financial performance. While there are some positive catalysts, such as partnerships and AI-driven initiatives, these are not sufficient to offset the broader challenges. A hold position is recommended until the company's financials and market sentiment improve.
The technical indicators for TU are bearish. The MACD histogram is negative and contracting, the RSI is neutral at 49.213, and the moving averages show a bearish trend (SMA_200 > SMA_20 > SMA_5). The stock is trading near its pivot level (12.332), with resistance at 12.817 and support at 11.847. Overall, there is no clear upward momentum.
Telus is leveraging AI to enhance customer experiences, which could drive retention and revenue. Additionally, its partnership with AST SpaceMobile for satellite broadband services indicates potential growth in the space industry.
Analysts have downgraded the stock and lowered price targets due to concerns over dividend sustainability, low population growth in Canada, and pricing pressures in the telecom sector. The company's financials also show declining revenue, net income, and EPS in the latest quarter.
In Q4 2025, Telus reported a YoY revenue decline of -1.89%, net income dropped by -18.44%, and EPS fell by -20.83%. However, gross margin improved slightly by 1.75% YoY to 41.38%. Overall, the financial performance indicates challenges in growth and profitability.
Recent analyst sentiment is negative. Multiple firms, including Scotiabank, Canaccord, and TD Securities, have downgraded the stock and lowered price targets, citing concerns over dividend sustainability, pricing pressures, and low visibility on asset divestitures. The consensus rating is neutral to bearish.
