Is RCI-B.TO undervalued? Our fair value estimate
Rogers Communications Inc. · Communication Services · TOR
How we got here
The estimate is computed from RCI-B.TO's reported fundamentals, with a growth assumption that is deliberately capped: small changes to an uncapped growth or terminal assumption can justify any price, and a number that can justify anything means nothing. These are the inputs the model holds for RCI-B.TO today; the exact method, and where it goes wrong, is on the methodology page.
The starting point is earnings power: what the business earns per share, and what the market currently pays for each unit of it.
The trailing growth rate informs the growth assumption, which the model caps deliberately: uncapped growth assumptions can justify any price.
Wall Street's published earnings growth forecast, used as context for the capped growth assumption, never swallowed whole.
Margins tell the model how much of each unit of revenue survives as profit, and how much room there is for that to erode.
Persistent high returns on capital are what a moat looks like in the accounts, and they feed the moat score alongside the valuation.
A volatility measure against the wider market. A jumpier share earns a larger discount for risk, which lowers the estimate.
Leverage haircuts the estimate: debt claims cash before shareholders do, and it turns bad years into dangerous ones.
Wall Street's number, next to ours
The mean analyst price target for RCI-B.TO is CAD60.61 across 18 analysts, which implies +31.2% from the current price. Our estimate is CAD106.88. They answer different questions: an analyst target is a 12-month price prediction averaged across banks; ours is a model's view of what the business is worth, with every assumption published. When they disagree, at least one of us is wrong.
Common questions
Is Rogers Communications Inc. (RCI-B.TO) undervalued?
On our model, RCI-B.TO at CAD46.20 trades 131% below our fair value estimate of CAD106.88, so it screens as undervalued today. That is one model's answer, not a recommendation: a fair value estimate is an argument about the future, and the market is frequently right about why something is cheap.
What is the fair value of RCI-B.TO?
Our current fair value estimate for Rogers Communications Inc. is CAD106.88 per share. For comparison, the mean Wall Street analyst price target is CAD60.61 across 18 analysts; that is their number, computed differently from ours. The estimate moves as prices and fundamentals move.
How is RCI-B.TO's fair value calculated?
From Rogers Communications Inc.'s reported fundamentals: earnings power, a deliberately capped growth assumption, and a discount for balance sheet and volatility risk. The full method, including its known weaknesses, is published on our methodology page, and the interactive Valuation Lab lets you change every assumption and watch the value move.
Disagree with an assumption? Good. The Valuation Lab on the RCI-B.TO app page puts every input of this model on a slider, including a reverse DCF that shows the growth the market is currently pricing in.
A fair value estimate is a model output computed from company filings and market data, refreshed daily; quotes are delayed. It is educational information, not financial advice and not a recommendation to buy or sell anything. Read the full disclaimer.