In a report released today, Jessica Reif Ehrlich from Bank of America Securities reiterated a Sell rating on Optimum Communications Inc Class A, with a price target of $1.50.
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Jessica Reif Ehrlich has given his Sell rating due to a combination of factors tied to Optimum’s challenged turnaround and capital structure. Although fourth-quarter EBITDA improved and certain segments like mobile and business services showed strength, overall revenue continues to decline, residential broadband losses remain sizable, and competition in broadband is expected to stay intense, pressuring subscriber trends and pricing power.
At the same time, Optimum carries a very heavy debt load of about $25.3 billion, with leverage above 7x and meaningful maturities approaching in 2027 that management has not fully addressed. Even with some modestly better forecasts for video losses and profitability, Jessica Reif Ehrlich expects ongoing revenue and EBITDA erosion, believes execution risk remains high, and therefore maintains a price objective below the current share price, supporting a Sell recommendation.
In another report released on February 3, TipRanks – Anthropic also downgraded the stock to a Sell with a $1.50 price target.