Optimum Communications downgraded to Hold from Buy at Benchmark

Benchmark analyst Matthew Harrigan downgraded Optimum Communications (OPTU) to Hold from Buy and removed the firm’s prior $5 price target While the firm acknowledges that approaching the stock as a “LEAP” could imply some equity value realization – especially if management manages to approximate its earlier $3.4B ambition for 2025 EBITDA delivery off significant cost reduction progression – it adds that approaching Optimum as a “normal equity” in lieu of an option pricing model leads it to arrive at a 2026 fair value of about $3 per share. Optimum is likely to have difficult increasing its footprint and realizing near-term penetration potential near peers given its excessively leveraged capital structure, the analyst added.