TD Securities lowered its price target on BCE Inc. (BCE.TO) to $32 from $37 on Friday.

Analyst Vince Valentini maintained a Hold rating on shares of the Canadian media and telecom company.

"Given elevated uncertainty surrounding dividend sustainability and the company's M&A strategy, we believe it is prudent at the current time to apply an approximate 15% risk and uncertainty discount to our EV/EBITDA based target price," Valentini said in a note to clients.

"This lowers our target price...," the analyst said.

Valentini said dividend spread analysis for BCE and TELUS Corp. (T.TO, TU) - two large cap stocks typically owned by investors for yield - "shows that dividend yields have increased significantly, resulting in much higher spreads than we normally see versus the Government of Canada 10-year bond yield."

The analyst said the market appears to be pricing in significant dividend cuts for both.

"...We view as totally inappropriate for TELUS," Valentini said.

"For BCE, the end of 2024 share price implied a 42% dividend cut if one assumed a move back to the long-term average spread of 373 basis points," the analyst said.

"Recall that we officially model a 25% dividend reduction in 2026, but some analysts have recommended a 50% cut."

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)