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TELUS provides three-year free cash flow growth target

By The Northwire Desk — AI Analysis Dec 03, 2025 · 06:45 T · 18.27 TELUS CORPORATION
T · Price

Executive Summary

  • TELUS announced a three‑year free cash flow growth target of at least a 10 % compounded annual growth rate (CAGR) from 2026 through 2028, with FY 2025 free cash flow projected at $2.15 bn and FY 2026 forecast at $2.4 bn.
  • The company will begin stepping down its Discounted DRIP in early 2026 and pause dividend growth while maintaining the current quarterly dividend of $0.4184 per share.
  • TELUS reaffirmed its deleveraging plan, targeting a net‑debt/EBITDA leverage ratio of ~3 × by end‑2027 (≈3.5 × as of Sep‑30‑2025, projected 3.3 × by end‑2026).

Key Details

  • Free Cash Flow Outlook:
  • FY 2025: $2.15 bn (projected)
  • FY 2026–2028: Minimum 10 % CAGR, with FY 2026 target of $2.4 bn.
  • Capital expenditures for 2026 targeted at ~$2.3 bn.
  • Dividend Policy:
  • Quarterly dividend remains at $0.4184 per share.
  • Dividend growth model (3‑8 % annually) paused until share price reflects growth prospects.
  • Discounted DRIP Step‑Down Schedule:
  • 2026 Q1–Q2: Discount reduced from 2.00 % to 1.75 % (Feb/May dividends).
  • 2026 Q3–Q4: Discount reduced to 1.50 % (Aug/Nov dividends).
  • 2027: Discount reduced to 1.00 %.
  • 2028 onward: No discount applied.
  • Leverage Targets:
  • Current net‑debt/EBITDA = 3.5 × (as of Sep‑30‑2025).
  • Expected ~3.3 × by end‑2026, aiming for ~3.0 × by end‑2027.
  • Strategic Initiatives Supporting Deleveraging:
  • Ongoing Terrion partnership and hybrid note issuances.
  • Non‑core asset divestitures.
  • Pursuing strategic partner for TELUS Health and monetization of real estate & copper assets.
  • Cash Dividend Coverage Ratio: Projected at ~75 % of free cash flow for each of the three target years, aligning with long‑term guidelines.

Notable Quotes

“Our confidence in delivering free cash flow growth at a minimum 10 per cent compounded annual growth rate through 2028 reflects our strong financial momentum.” – Darren Entwistle, President and CEO

All forward‑looking statements are subject to risks and uncertainties detailed in TELUS’ MD&A filings.

Read the original news release →

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