Altice USA: 16% Correction Was Overreaction To Q2 Broadband Stability (Preview)
Company Update (ATUS US) (Buy)
Summary
ATUS stock has fallen 15.5% since Q2 results on July 28, which we believe to be an over-reaction and represents an opportunity.
Zero organic Broadband net add in Q2 was due to COVID-related move churn and the end of mandated payment extensions.
Competition has remained manageable, ATUS is confident about H2, and "edge out" and fiber upgrade will help future years.
Free Cash Flow Yield is nearly 10%, and Free Cash Flow/Share will grow at double digits even with conservative assumptions.
With shares at $28.81, we expect an exit price of $58 and a total return of 101% (22.8% annualized) by 2024 year-end. Buy.
Introduction
Altice USA, Inc. (ATUS) released Q2 2021 results after markets closed on July 28. Shares have since fallen 15.5%, including 8.4% the day after results.
We upgraded our rating on ATUS from Neutral to Buy in November 2020. ATUS stock has lost 4.4% since, when peers Charter and Comcast (both Buy-rated in our coverage) each gained double digits.
ATUS shares had been strong b…