Analysts Downgrade Altice USA - Read Why

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  • Two analysts downgraded Altice USA Inc ATUS.
  • Societe Generale analyst Nick Lyall downgraded Altice USA to Hold from Buy with a $12 price target (8% upside). 
  • Competition has cut growth and forced management to accelerate the fiber roll-out. While acknowledging that this is a "sensible move," the risks are high, the analyst noted.
  • See Altice USA's Acceleration Of Fiber Deployment Strategy
  • Also see Altice USA's Q4 Results
  • Evercore ISI analyst James Ratcliffe also downgraded Altice USA to In-Line from Outperform with a price target of $15, down from $25 (35% upside).
  • The re-rating follows the company's decision to go all-in on fiber with an "aggressive" plan to reach 6.5 million fiber homes by year-end 2025. 
  • His argument is not that these fiber investments are necessary but "rather that they're fundamentally defensive."
  • Racliffe estimates that nearly 4.9 million of the ~5.4 million fiber homes the company plans to build in 2022-25 will be upgrades of the company's existing footprint rather than expansion into new addressable markets. 
  • Given the long-term nature of the company's investments, and lack of certainty about returns, Ratcliffe is moving to the sidelines.
  • Price Action: ATUS shares traded higher by 0.14% at $11.08 on the last check Wednesday.
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Posted In: Analyst ColorNewsDowngradesPrice TargetAnalyst RatingsTechBriefs
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