Will the divestiture lead to a re-rating of Rogers' valuation multiples compared to its peers?

Answer

The sale of the data‑centre portfolio will strip out a non‑core, capital‑intensive business and leave Rogers (RCI) with a “pure‑play” telecom model that is easier to compare with the U.S. and Canadian telco peers. By removing a low‑margin, high‑capex asset, the company’s adjusted EBITDA margin and free‑cash‑flow conversion are expected to improve, which should lift the forward‑EV/EBITDA and P/E ratios relative to the sector. If the divestiture is completed on the announced terms and the proceeds are used to reduce debt or fund higher‑return network upgrades, analysts will likely upgrade the earnings outlook and apply a higher multiple—i.e., a re‑rating of Rogers’ valuation.

Technical view & trade idea

Since the announcement, RCI has seen modest upside on modest volume, testing the $45‑$48 range (its recent 20‑day high). A break above $48 on strong volume would signal the market’s early acceptance of the re‑rating narrative and could open a short‑term swing to the $52‑$55 resistance zone, where the 50‑day moving average and a prior consolidation level sit. Conversely, a retest of the $42‑$43 support band with a bearish candlestick pattern would suggest the market still doubts the upside and may keep the stock priced at a discount to peers for the near term.

Actionable insight

- If you’re bullish on a re‑rating: consider a long position on any pull‑back to $42‑$44 with a stop just below $41, targeting the $48‑$52 breakout zone.

- If you’re skeptical: look for a short‑bias on a breach of $48 with a stop at $50, aiming for the $44‑$42 support area.

Overall, the divestiture removes a drag on profitability and should, all else equal, push Rogers’ multiples higher than its current peer set—provided the execution is clean and the capital is redeployed efficiently. The price action in the next 2‑4 weeks will be the clearest barometer of whether the market is already pricing in that re‑rating.