TELUS Corporation (TSX: T) shares have tumbled to levels not seen since April 2017, extending a prolonged decline that has erased more than half of the company's market value from its 2022 peak. The stock now trades around C$12.60, down from a record high of C$25.60 reached in April 2022. This dramatic slide has reduced the telecom giant's market capitalization from over C$45 billion to roughly C$20.4 billion.
Strategic shifts and financial strain
The latest leg of the sell-off followed the company's second-quarter earnings report, which revealed a significant dividend reduction aimed at preserving cash. Management projects the cut will save approximately C$2.78 billion through 2028. In addition, TELUS eliminated its dividend reinvestment plan (DRIP), which had allowed shareholders to automatically purchase additional shares at a discount using their dividends—a feature that had supported the stock and aided compounding returns.
The company also reported a substantial net loss of C$1.83 billion for the quarter, driven largely by a C$2.1 billion goodwill impairment in its TELUS Digital segment. Revenue slipped 2% year-over-year to C$4.9 billion, while operating expenses surged 32% to C$6.5 billion, reflecting ongoing inflationary pressures and supply chain disruptions.
To bolster its balance sheet, TELUS has initiated a strategy to divest certain assets. The company also maintained its capital expenditure guidance, planning to spend C$2.6 billion this year, with C$678 million already deployed in the second quarter.
Technical outlook: bearish signals persist
From a technical perspective, the weekly chart shows TELUS stock breaking below a long-term trading range that had held between C$16.90 support and C$20.72 resistance. The breakdown occurred in early April, confirming that sellers remain in control. A death cross formed in December when the 50-week and 200-week exponential moving averages crossed bearishly, a pattern often associated with further downside.
The stock is now testing a critical support zone—the lowest levels seen during the 2020 market turmoil. If this support fails, the next major target could be the C$10 level, a psychological and historical support area.
Investors are also watching broader telecom sector trends and macroeconomic factors, including interest rates and competition. For context, other Canadian telecoms have faced similar headwinds, but TELUS's aggressive expansion into digital and health services has added unique risks. The company's decision to cut dividends marks a significant shift for income-focused investors, who have long viewed TELUS as a reliable payer.
While the stock's valuation has become cheaper on a price-to-earnings basis, the ongoing operational challenges and uncertain outlook suggest that value investors may want to wait for clearer signs of stabilization. The company's asset sale program and cost-cutting measures could provide some support, but the technical picture remains bearish.
For more on how broader market dynamics are affecting Canadian equities, see our analysis on cross-border tariff impacts. Additionally, investors might find relevant insights in our copper price analysis as commodity trends often influence the Canadian economy.
As TELUS navigates this challenging period, market participants will closely monitor its progress on asset sales, debt reduction, and any signs of operational recovery. The next earnings report will be crucial in determining whether the stock can find a bottom or if further declines are in store.
This article is for informational purposes only and does not constitute financial advice.
