(Bloomberg) -- The stage is set for a comeback for BCE Inc. shares after the battered telecom giant’s dividend yield reached multiyear highs this week.

BCE — one of Canada’s big three cable providers — has slumped 7.7% so far in 2023 but its dividend yield rose above 7% this week, levels last reached during the global financial crisis and at the start of the Covid-19 pandemic in March 2020.

Past periods with such rich yields have been followed by a 25% rally for the company’s shares in the subsequent 12 months, according to National Bank of Canada analyst Adam Shine. That was enough for him to upgrade his recommendation on the parent company of Bell Media and Bell Canada to a buy-equivalent outperform rating from sector perform Wednesday.

After losing around $9.7 billion in market value from a May high, Shine expects the stock may have found its nadir with a “confluence of negativity” — including higher interest rates hitting high-yielding stocks and a sterner regulatory backdrop — already priced into the stock and broader sector. And those concerns may be waning.

“The rate-hike cycle appears closer to a conclusion even if rates may stay higher for longer than some might have otherwise anticipated,” he wrote in a research note, adding last year’s appointment of a new head to Canada’s media regulator hasn’t led to anything substantive “to truly impact the state of competition.” 

Shine said the company was already telegraphing better growth for the latter half of the year as BCE reiterated its guidance in the second quarter on improving earnings before interest, taxes, depreciation and amortization and restructuring savings. His team maintained their price target at C$60. 

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