Can dividend reinvestment plan discount elimination weigh on TELUS stock?

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Telus drops 1.14% to C$11.73 today

Highlights

TELUS will cut its quarterly dividend by 55 percent to C$0.1875 per share starting October 1.
TELUS will end the dividend reinvestment plan discount and net debt stands at 3.5 times adjusted EBITDA.
Shares of TELUS trade below all key moving averages with strong bearish momentum and a projected range of C$11.57 to C$11.89 over the next few days.

Dividend cut and debt burden pressure sentiment as liquidity takes priority

TELUS has announced a 55% reduction to its quarterly dividend, lowering it to C$0.1875 per share beginning October 1, a move that directly impacts shareholder returns and signals a strategic shift toward managing liquidity and debt. The company will also eliminate the discount on its dividend reinvestment plan, which previously provided an incentive for long-term accumulation of shares. Net debt remains elevated at approximately 3.5 times adjusted EBITDA, reinforcing a cautious outlook on balance sheet flexibility. TELUS was reported by MarketBeat to have reached a new 52-week low, reflecting the cumulative effect of these developments on market sentiment.

Momentum favors sellers with bearish signals below resistance levels

Technically, T is trading below the MA-20 at C$11.94, MA-50 at C$12.09, and MA-200 at C$16.47, with immediate resistance set by the Ichimoku Kijun at C$11.93. Momentum indicators point to continued selling: MACD signals a Strong Sell, ADX a Sell, and RSI at 42.19, along with Stochastic RSI and CCI, all indicate prevailing bearish momentum. Bull/Bear Power confirms seller dominance in intraday action, while the Awesome Oscillator remains Neutral and does not signal a reversal. Price closed near today’s low after an intraday 0.04 gap down, and downside momentum is unopposed by any divergent indicator setup.

Further downside likely unless resistance break sparks rebound

Over the next two to three trading days, T is expected to fluctuate within a range of C$11.57 to C$11.89, in line with recent volatility. There is a high probability of further downside, while rebound odds are very low. If price decisively breaks above C$11.93, this would open the path for a recovery scenario, while a sustained drop below C$11.57 support could accelerate the prevailing downtrend.

Viktoras Karapetjanc, expert at Traders Union, believes TELUS faces headwinds from its aggressive dividend cut and balance sheet risk. He sees current sentiment as negative, driven by a focus on liquidity preservation rather than growth. Short-term price action is pressured by bearish technicals and cautious macro signals. However, the analyst maintains a constructive view if stability returns. "If TELUS can hold C$11.57 and address leverage concerns, optimism may return to the stock in the coming weeks."

Earlier, analysts noted that TELUS was exhibiting persistent downside momentum and a cautious technical outlook. This latest update adds a fundamental dimension to the negative trend, with dividend reductions and leverage concerns now reinforcing downside risk—making C$11.57 a critical support to monitor for an accelerated move lower.

Source of Data: T Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.