BCE - BCE: Downgrade On Deteriorating Economy

2024-07-07 09:04:42 ET

Summary

• BCE is a leading telecommunications provider in Canada with a strong market share and a diverse media business.
• BCE's first-quarter results were steady and in line with analyst estimates. However, I worry about the effects of a deteriorating Canadian economy.
• Looking farther out, tightening immigration rules may curb the new customers in the wireless markets, leading to increased price competition between carriers.
• I am also worried that management has moved the goalpost on leverage, suggesting they do not have any plans to delever the business.

A few months ago, I wrote a bullish article on BCE Inc. (BCE), detailing three reasons why I added the Canadian telecom giant to my retirement portfolio. However, upon further reflection, I have changed my mind and sold my position for a small loss.

Normally, I am a long-term investor with a time horizon of at least a year, so this abrupt change of heart is highly unusual. In this article, I will go over the reasons behind my decision....

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