Quebecor Selloff Amid Mixed Q1 Results Is Unwarranted, but Uncertainty Remains on Wireless Ambition

Quebecor reported a decent first quarter that was generally consistent with our expectations and the recent muted trends. Telecom, which accounts for more than 80% of revenue and essentially all profits, posted decent results, with good mobile performance and stable internet revenue, while TV and voice sales continue to decline. In our view, most of the pressure on the stock is due to uncertainty surrounding the fate of Shaw’s Freedom Mobile, which has been at the top of the news this week as Rogers attempts to salvage its merger with Shaw.