Zacks Investment Research downgraded shares of Rogers Communications Inc. (RCI) from OUTPERFORM to NEUTRAL on January 08, 2013, with a target price of $48.00.
We are downgrading our recommendation on Rogers Communications to Neutral based on its high level of current valuation, which moved up nearly 36% in the last year. The company's third-quarter 2012 financial results easily surpassed the Zacks Consensus Estimates. We believe significant expansion of LTE networks and an attractive dividend yield will support the stock price in the near future. As of now, Rogers expanded its superfast LTE network to 60% of Canada. Management expects to achieve 100% foothold by late 2013. Deployment of LTE network has resulted in an 80% year over year increase of Internet usage by its subscribers. Growing demand for mobile data and huge activation of latest smartphones will pave the way for Rogers' future growth. Nevertheless, we believe that Rogers Communications is currently fairly valued and the stock price will not provide above market gain any time soon.
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