Why Did TELUS International Plunge 14.75%? Analyst Downgrades

On July 23, 2025, TELUS International experienced a significant drop of 14.75% in pre-market trading, reflecting a notable shift in investor sentiment towards the company.

National Bank Financial has downgraded TELUS International from an "outperform" rating to a "sector perform" rating, citing limited upside potential from current levels. This move comes as TELUS International's shares are trading around $4.00, indicating a cautious outlook from analysts.

TELUS Digital, a subsidiary of TELUS International, has also been downgraded by National Bank Financial. The rating was changed from "outperform" to "sector perform," with a price target set at $4.00. This adjustment follows a nearly 50% increase in TELUS Digital's stock price since May, driven by strong first-quarter results and TELUS's interest in acquiring the remaining shares of the subsidiary.

TELUS made a non-binding offer in June to buy the remaining shares of TELUS Digital for $3.40 each, valuing the company at approximately $2.3 billion. However, the stock has since climbed to $4.00, pushing the valuation to 5.4 times EBITDA, which is comparable to similar companies like Concentrix. This suggests that TELUS may need to offer more to complete the acquisition, further impacting investor sentiment.