Rogers Communications' (RCI) capital expenditure reduction continues to support organic de-levering, which management targets to improve by 40 to 50 basis points over the next four years, RBC Capital Markets said in a note Tuesday.

The company lowered its 2026 capex guidance to between 2.5 billion Canadian dollars ($1.83 billion) and CA$2.7 billion, from CA$3.3 billion to CA$3.5 billion previously, pushing free cash flow guidance higher to between CA$4.1 billion and CA$4.3 billion, from CA$3.3 billion to CA$3.5 billion, the brokerage said.

RBC said Rogers Communications' management intended to allocate the incremental annual free cash flow of about CA$800 million to debt repayment. The investment firm also noted that the capex cuts are planned to be sustained as the company moves to prioritize critical investments across its networks.

RBC Capital Markets raised its price target on Rogers Communications to CA$63 from CA$61, with an outperform rating.

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