TELUS Corporation: Clarity postponed until July 1

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TELUS Corporation: Clarity postponed until July 1

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TELUS Corporation

Clarity postponed until July 1

Reiterate Rating: BUY | PO: 22.00 CAD | Price: 17.18 CAD

Waiting on new leadership’s capital allocation priorities 12 May 2026

“I would like clarity, one way or the other” was the message from outgoing CEO Darren Equity

Entwistle at the conclusion of the 1Q26 earnings call on the topic of dividend

sustainability. It’s a sentiment we share. “So make a call” he continued which is exactly

Key Changeswhat we believe investors want. Our interpretation of this situation is that incoming

leadership’s capital allocation decisions are contingent on the performance of the outgoing (C$) Previous Current

administrations TELUS Health (and perhaps Real-Estate) monetization activities. 2026E Rev (m) 21,046.9 20,887.9

Underperformance on this file could increase the probability of a dividend cut while 2027E Rev (m) 21,787.9 21,470.5

delivering on target could increase the probability the current dividend growth pause is 2028E Rev (m) 22,070.2 21,677.9

sufficient to return the dividend payout to below 100% of free cash flow. Absent this type 2026E EPS 0.93 0.89

of interdependence, we struggle to understand the lack of clarity. Clarity will only come 2027E EPS 1.03 0.97

once new leadership officially begins on July 1, 2026, in our opinion. 2028E EPS 1.02 0.95

Reiterate Buy; Dividend sustainability achievable Matthew Griffiths, CFA >>

Research Analyst

At the end of 2025E, the declared dividend was 116% of free cash flow. Given the Merrill Lynch (Canada)

numerous monetization options, ability to reduce capex, and the ongoing focus on opex +1 416 369 8492 matthew.griffiths1@bofa.com

efficiency, we believe TELUS will reduce its payout to the 90% range (or better) by 2028E.