Analysts Raise Competitive, Pandemic Recovery Concerns For Charter Communications

Bernstein analyst Peter Supino downgraded Charter Communications Inc CHTR to Market Perform from Outperform with a $788 price target, implying a 9.69% upside.
Charter's 5.2% 2021 levered free cash flow yield seems reasonable in a low-interest rate world. Supino continues to see a capital appreciation opportunity in the stock. However, competition from T-Mobile US Inc TMUS in the value segment could cause downward revisions of Charter's 2022-2023 consensus internet net additions.
Additionally, Supino estimates pockets of elevated competition from AT&T Inc's T Fiber in the market's premium segment that could pressurize Charter's average per-user modestly and cap net add forecasts. He observes Charter as fairly valued at current share levels.
Barclays analyst Kannan Venkateshwar raised the price target to $675 from $575, implying an 8.3% downside and reiterating an Equal Weight rating.
The cable industry has gained from acceleration in broadband penetration, lower churn over 2020. The continued impact of stimulus on household income and governmental broadband subsidy programs will likely keep churn low throughout 2021. However, these tailwinds could also lead to a more difficult broadband growth environment in 2022.
Price action: CHTR shares traded lower by 3.04% at $714.09 on the last check Monday.