© Reuters. Charter Communications (CHTR) investment risk understood – Wells Fargo
By Sam Boughedda
Wells Fargo analysts raised Charter Communications (NASDAQ:) to Equal Weight from Underweight in a research note, cutting the firm’s price target on the stock to $340 from $370 per share.
They told investors the company’s investment risk is understood.
“CHTR’s network evolution and capex plans are now well understood. We believe the downside to CHTR has been de-risked, as is the case with Cable more broadly,” wrote analysts.
The analysts explained that the company’s investor day outlined the network evolution “including DOCSIS4.0, leaning into mobile solutions + Spectrum One and significant line extension plans to grow the subscriber base into rural America.”
“CHTR is guiding to $6.5-$6.8bn in ’23E capex before line extensions, which includes a minority portion of the ~$5.5bn network evolution to DOCSIS4.0 that will be largely complete by 2025 at ~$100/passing. CHTR is guiding to an additional ~$4bn in line extension capex in ’23E, i.e., total capex of ~$11bn. Peak core capex is likely in 2024-25 and core capex intensity should then moderate significantly. CHTR shares reacted negatively last week to the higher capex outlook,” the analysts added.
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