Zacks senior telecom sector analysts David Weissman, CFA and Ekta Bagri have recently evaluated the shares of Canadian telecommunications company TELUS Corporation (TU) and issued a Hold rating. Here are some of the reasons why:

'We maintain our Hold rating on Telus Corp, the second largest telecommunications provider in Canada. Recent results demonstrate strong wireless and high-speed Internet operating performance although the introduction of Wireless Number Portability (WNP) increased operating expenses.

'Nevertheless, we are impressed by management's commitment to return enhanced value to shareholders through continued share buyback programs and increased dividend payouts. Meanwhile, the company recently announced that it was not interested in acquiring Bell Canada (BCE), the leading carrier in Canada.

'Telus is trading at 18.0x our 2007 earnings estimate, which represents a discount to the industry group but a modest premium to the S&P 500. On the basis of enterprise value (EV) to EBITDA (earnings before interest, taxes, depreciation and amortization), the stock is trading at 6.8x estimated 2007 EBITDA, which is roughly in line with the peer group average.

'The competitive landscape in Canada is changing with major cable and wireless initiatives competing for the same consumer and business customer base. We are encouraged by Telus' wireless business prospects, but remain cautious about access line erosion in the wireline segment. Our US$55.00 price target is based on a forward P/E multiple of 17.5x.'