Quebecor Inc.

Quebecor Inc. (TSX: QBR.B) is a telecommunications and media company. The Company's segments include Telecommunications, Media, and Sports and Entertainment.

Why Should Investor’s Book profit?

• Higher balance sheet risk: The company’s balance sheet is significantly leveraged, with Debt/Equity ratio of 5.25x significantly higher compared to industry median of 1.06x, implies a greater balance sheet risk. Further, % Lt debt to total capital stood at 81.8% whereas industry median of 39.2%.
• Long-term bearish trend: From the technical standpoint, QBR.B shares have entered into a long-term bearish zone, with stock hovering well below its crucial short-term as well as long-term support level of 50-day, 100-day, and 200-day SMAs.

Technical price chart (as on December 13, 2021). Source: REFINITIV, Analysis by Kalkine Group

• Bearish Momentum indicators: The leading momentum indicator MACD is falling consistently, with the spread between 12-day and 26-day EMA is negative, a bearish indicator. Further, 14-day RSI is hovering in neutral zone with strong bearish bias.

Technical price chart (as on December 13, 2021). Source: REFINITIV, Analysis by Kalkine Group

Stock recommendation

The investors are significantly exposed to balance sheet risk because of higher debt contribution. Also, highly leveraged balance sheet is one reason why its shares are available at a discount to its peer’s from valuation standpoint. Further, the stock is hovering into long-term bearish zone and momentum indicators as of now not giving any sign of reversal from the current levels. Hence, we recommend a “Sell” rating on “QBR.B” stock at the closing price of CAD 27.83 (as on December 13, 2021).

1-Year price chart (as on December 13, 2021). Source: REFINITIV, Analysis by Kalkine Group.

*The reference data in this report has been partly sourced from REFINITIV.

Disclaimer

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