Charter Communications: Hold Rating Amidst Growth and Competitive Challenges

Bernstein analyst Laurent Yoon downgraded the rating on Charter Communications (CHTR – Research Report) to a Hold today, setting a price target of $410.00.

Laurent Yoon has given his Hold rating due to a combination of factors influencing Charter Communications’ current market position. The company’s stock has seen a significant rise, approximately 40% year-over-year and 15% year-to-date, outperforming the flat S&P index. However, despite this growth, there are ongoing secular challenges that Charter faces, such as the anticipated peak in capital expenditures in 2025 and the subsequent rise in cash flow starting in 2026, which supports its leveraged buyback program.
Additionally, Charter has been experiencing a loss in broadband subscribers for nine consecutive quarters, with uncertainties surrounding the return to positive net additions due to the expansion of fiber and fixed wireless access (FWA) by competitors. While recent developments suggest a more resilient future for Charter, including stabilizing subscriber losses and increasing mobile ARPU, the competitive landscape remains challenging. The potential deal with Cox could provide some relief through added scale and cost synergies, but it does not fully address the near-term fundamental challenges. As a result, Yoon has adjusted the price target slightly to $410, reflecting the improving profitability of Spectrum Mobile, but maintains a Hold rating due to the limited upside potential in the current environment.

According to TipRanks, Yoon is a 4-star analyst with an average return of 10.3% and an 80.65% success rate. Yoon covers the Communication Services sector, focusing on stocks such as AT&T, T Mobile US, and Verizon.

In another report released on May 27, Morgan Stanley also maintained a Hold rating on the stock with a $415.00 price target.