Altice USA (ATUS) - Get Altice USA, Inc. Class A Report shares fell sharply Monday, after Credit Suisse and Raymond James downgraded the stock -- to neutral in Credit Suisse’s case and to market perform for Raymond James.
Both rated the cable and broadband provider outperform previously. Credit Suisse analyst Doug Mitchelson slashed his price target to $24 from $46.
The stock on Monday fell 5% to $19.55 at last check. It has dropped 42% over the past six months amid struggles with customer losses.
Altice's CEO Dexter Goei said last week he anticipates that 15,000 to 20,000 broadband customers will ditch it this quarter.
Goei, whose company offers service under the Optimum brand, called those numbers “disappointing,” and “underwhelming” at a Goldman Sachs investor conference cited by Bloomberg News.
He attributed the customer losses to bad weather, tighter government rules and weaker-than-expected sales during the back-to-school season.
As for the analysts, "[W]e have been wrong on Altice's current broadband competitiveness and near-to-mid-term growth outlook, and expect management's new investment strategy (to be detailed with 3Q21 earnings) will take at least several quarters, if not longer, to begin bearing fruit," wrote Credit Suisse’s Doug Mitchelson, according to MarketWatch.
Meanwhile, Raymond James’ Frank Louthan said he made the downgrade after “recent management commentary detailing broadband adds pressure and the strategic shift toward heavier investment and away from buybacks, which were a key part of the value proposition for ATUS shareholders.”
Louthan sees “the need for an operational reset and reboot. Mobility continues to be a drag, as management has focused primarily on profitability rather than aggressive pricing…”