Rogers Communications Poised To Benefit From Capex Reset, Sports Monetization

Rogers Communications Inc’s (NYSE:RCI) capex reset continues to strengthen free cash flow generation, according to Scotiabank analyst Maher Yaghi.

In addition, the monetization of Maple Leaf Sports & Entertainment (MLSE) is "underway," he added.

The Rogers Communications Analyst: Yaghi reiterated a Sector Outperform rating and cut the price target from $60 to $59.

The Rogers Communications Thesis: While the company reported top- and bottom-line results in line with expectations, it added only 17,000 net phone subscribers in the third quarter. That’s significantly below the consensus estimate of 59,000, Yaghi said in a note.

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He added that Rogers reported 6,000 postpaid and 11,000 prepaid subscribers, with the weakness stemming from:

• Slower immigration
• Zero population growth
• Company strategy that prioritizes profits over chasing low-margin volume

ARPU (average revenue per user) fell 2.6% year-over-year to $55.22, largely because CRTC rules banned certain activation fees, the analyst said. He added, however, that higher pricing for new customers and rate hikes for current users are likely to offset this as the company enters the fourth quarter.

The company spent $524 million on capex in the third quarter and generated about $1.4 billion in free cash flow, Yaghi said. He added that capital spending is targeted at $2.5-$2.7 billion annually.

"In our view, this reinforces the sustainability of Rogers’ lower capital intensity and provides greater visibility into FCF growth and continued deleveraging beyond 2026," Post wrote.

The analyst said the acquisition of the remaining 25% of MLSE temporarily pushed leverage much higher, but Rogers Communications has a clear plan to lower debt by the first half of 2027. He added that this could be done through:

• Organic cash flow
• Securitizing $1.0 billion in Rogers Bank receivables
• Selling a 20% minority stake in MLSE

"Overall, we remain positive on the company’s focus on profitability, FCF generation, capital discipline, and deleveraging," Post wrote.

RCI Price Action: Shares of Rogers Communications rose 0.68% to $32.60 at the time of publication on Monday.

Read More: Rogers Communications Q3 2026 Earnings Call Transcript

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