QBR.B: Staying the Profitable Course

Research evidence excerpt

QBR.B: Staying the Profitable Course

ion from 7.4x at the Prev. 4.38 4.71 5.01

beginning of this year was predicated on the ability to deliver sustained P/AEPS 16.2x 14.3x 12.7x 11.8x

mid-single digit Telecommunications adjusted EBITDA growth (versus our

forecast of +3%-4% at the time). While wireless KPIs (ARPU growth, net Revenue Q1 Q2 Q3 Q4 2025 1,343.1A 1,380.4A 1,405.5A 1,546.3A

additions) are tracking in-line to slightly below our expectations at the 2026 1,395.2A 1,420.1E 1,441.3E 1,531.3E

beginning of the year, we believe wireline performance is benefiting Prev. 1,374.3E 1,409.0E 1,438.7E 1,529.5E

from a much more constructive pricing environment in Quebec despite EBITDA

still modest Internet subscriber growth. Following upward revisions to 2025 549.6A 605.1A 628.1A 610.4A 2026 576.6A 618.6E 639.4E 623.3E

our Telecommunications adjusted EBITDA growth estimates to +5%-6% Prev. 600.3E 643.0E 634.0E 619.6E

(including stock-based compensation) and an increase in our blended

target EV/EBITDA multiple to 7.7x, our price target increases from $60 PeladeauAll values Familyin CAD (equityunless otherwise31%, votingnoted.76%)

to $64. Additionally, our Telecommunications forecast factors in: (i) Priced as of prior trading day's market close, EST (unless otherwise noted).

+3% revenue growth incorporating +7%-8% wireless network revenue

growth, stable cable revenue growth, and annual wireless ARPU growth

of +1%-2% and net additions of +275k-300k (post-2026); and (ii)

+50bps-100bps of annual margin expansion with estimated wireless

and cable margins approaching those of industry-leader Rogers over

the next 3-5 years. While these trajectories will clearly remain subject

to what continues to be a fluid telecom pricing environment as well