The issue is fundamentals, Wells Fargo analyst Steven Cahall wrote in a commentary cited by CNBC. He’s focused on the slowdown of cable subscriber growth. Cable customers are cutting the cord, shifting to streaming video services instead.
“We’re now taking a more bearish stance on the cable sector’s outlook and by default CHTR’s as the industry standard-bearer,” he said.
Charter ended the day off 4.8% at $706.13.
Cahall also lowered his price target for Comcast (CMCSA) - Get Free Report to $41 from $49, keeping his rating at underweight. Comcast recently traded at $55.25, down 4%, and has fallen 9% in the last month.
The analyst slashed his price target for Altice USA (ATUS) - Get Free Report to $21 from $34, maintaining his equal weight rating. Altice recently traded at $18.86, down 2%, and has plunged 30% in the last month.
Cahall downgraded Cable One (CABO) - Get Free Report to equal weight from overweight, trimming his price target to $2,100 from $2,400. The stock recently traded at $1,777, down 3%, and has dropped 11% in the last month.
Getting back to Charter, Morningstar analyst Michael Hodel likes the company.
“Our margin expectations have been a bit too low,” he wrote after its earnings report in July. “With increased pricing and margin assumptions, our fair value estimate increases to $600 per share from $565. Despite the increase, we believe the shares remain modestly overvalued.”