Charter: Shares Down 10% After Over-Reaction To Conference Comments

(Preview) Company Update (CHTR US) (Buy)

Summary

• Charter stock has fallen 9.9% in 4 days in reaction to comments at this week's investor conferences and is now 25.9% down from its peak.

• Negative comments included peers Comcast and Altice USA cutting their 2021 outlook, and T-Mobile exceeding its 2021 fixed wireless target.

• However, we believe the main driver for decelerating Cable broadband net adds this year is the unwinding of COVID-19's boost to demand.

• Charter maintained it is gaining market share even where there is fiber or fixed wireless competition; there was good news on Mobile and costs.

• With shares at $611.97, we expect a total return of 125% (30.3% annualized) by 2024 year-end, in just over 3 years. Buy.

Introduction

We review Charter Communications, Inc. after shares fell 9.9% in four days (December 6-9) this week, in reaction to comments by various Cable and Telecom executives at two investor conferences (held by UBS and Barclays respectively).

We initiated our Buy rating on Charter in January 2020. As of Thursday's cl…