UPDATE: Wunderlich Securities Initiates Coverage on Charter Communications with Buy Rating, $170 PT Following Results of Valuation Model

In a report published Tuesday, Wunderlich Securities analyst Matthew Harrigan initiated coverage on Charter Communications CHTR with a Buy rating and $170.00 price target. In the report, Wunderlich Securities noted, “We are initiating coverage of Charter Communications, Inc. (CHTR) with a Buy rating and $170 price target. The latter is arrived at through a valuation model that re-couples media stocks to the S&P 500 rather than assigning arbitrary multiples. The underlying operating model integrates our Verizon FiOS/AT&T u-Verse competition, with CHTR benefiting from only a 4% overlap against very competitive FiOS and a superior product proposition against a near 30% u-Verse footprint. Well regarded (to some, iconic) Charter CEO Tom Rutledge will likely be facile in closing some of the gap to peers in product penetration and EBITDA contribution per passing. We also assess the technology roadmap and cost impact of improved operations for both MSOs in any Time Warner Cable (TWC-$111.02, Hold) merger.” Charter Communications closed on Monday at $132.49.