Market Overview

Barclays Says Charter Communication's SpinCo Investment Still Not Priced In

Share:
Related CHTR
15 Billion-Dollar Companies With Negative Net Earnings
U.S. M&A Market: 5 Trends From The Month Of May
Will Comcast & Discovery Settle Shark Week Dispute? - Analyst Blog (Zacks)

Despite a big run-up in share price, Charter Communications (NASDAQ: CHTR) may not be fully valued, according to one analyst.

Barclay's Kannan Venkateshwar said Charter's 33 percent stake in the soon-to-be-created SpinCo hasn't yet been priced in by the market.

SpinCo, with an expected value of more than $14 billion, is the result of anti-trust concerns related to the pending $45 billion acquisition of Time Warner Cable by Comcast. The plan was announced in April.

In addition to the stake in SpinCo, Charter is expected to soon acquire 1.4 million new subscribers for $7.3 billion. Currently those subscribers are Time Warner Cable customers.

Charter, whose largest shareholder is Liberty Media (NASDAQ: LMCA), will have an option to acquire SpinCo in four years.

Although maintaining an Equal-Weight rating on Charter, "we're very positive on their earning potential in light of this transaction," Venkasteshwar said.

Venkasteshwar raised his Charter target to from $125 to $157 and boosted his target on Liberty from $1.65 to $1.72.

Liberty traded recently at $138.19, down 0.76 percent; Charter was changing hands at $160.53, down 1.16 percent.

Latest Ratings for CHTR

DateFirmActionFromTo
May 2015JP MorganMaintainsNeutral
May 2015WunderlichUpgradesHoldBuy
May 2015Canaccord GenuityMaintainsBuy

View More Analyst Ratings for CHTR
View the Latest Analyst Ratings

Posted-In: Barclay Kannan Venkateshwar SpinCoAnalyst Color Reiteration Analyst Ratings

 

Related Articles (CHTR + LMCA)

Around the Web, We're Loving...

Get Benzinga's Newsletters