Market Overview

Raymond James: Charter's Fee Cash Flow Will Rise On Declining Capex

Share:
Raymond James: Charter's Fee Cash Flow Will Rise On Declining Capex

Charter Communications, Inc. (NASDAQ: CHTR) underperformed Street expectations in its fourth-quarter earnings. The sharp, bottom-line miss didn’t faze Raymond James, though.

The Rating

Analyst Frank Louthan maintained a Strong Buy rating on Charter and raised his price target from $365 to $400.

The Thesis

Louthan expressed optimism around the “economics” of the company, as Charter exceeded estimates in residential customer counts, revenue and earnings before interest, tax, depreciation and amortization (EBITDA).

“Our thesis remains that Charter as a scale provider has the ability to gain incremental share of current passings and can continue to profitably grow EBITDA and FCF/ share with or without video subscriber growth,” he wrote in a note.

Consistent with Louthan’s forecasts, Charter guided for an annual capex decline, which drove a stock pop following the fourth-quarter earnings print. The analyst anticipates waning capital intensity to drive growth in free cash flow.

“Investors have seen this management team reduce capital intensity and its real and sets a new baseline, in our view,” Louthan wrote. “As such, it should have a positive impact on FCF for street models.”

Raymond James increased its revenue, EBITDA and FCF estimates to account for capex declines and expected share repurchases.

Price Action

At time of publication, Charter shares traded around $339.38.

Related Links:

Experts: Viacom-Netflix Deal Could Spark New Media Trend Toward OTT Content Partnerships

'Convergence' Is Key: Credit Suisse Weighs In On The Telecom And Media Sector

Latest Ratings for CHTR

DateFirmActionFromTo
Nov 2019MaintainsBuy
Oct 2019MaintainsBuy
Oct 2019MaintainsOverweight

View More Analyst Ratings for CHTR
View the Latest Analyst Ratings

Posted-In: Frank Louthan Raymond JamesAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

 

Related Articles (CHTR)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
TORCCantor FitzgeraldDowngrades3.0
CIDMCanaccord GenuityMaintains1.5
TDGCanaccord GenuityMaintains620.0
DLPNCanaccord GenuityMaintains1.6
WBCLSADowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Analyst Raises Zions Bancorp Price Target After Board Approves Buyback

Apple Is The 'Better Mind' In The Tech Space, Pro Says