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Investing.com - Bernstein SocGen Group has reiterated its Outperform rating on Charter Communications (NASDAQ:CHTR) with a price target of $380.00. The stock, currently trading at $258.77, has fallen more than 10% since the firm’s upgrade and is trading near its 52-week low. According to InvestingPro analysis, Charter appears undervalued based on its proprietary Fair Value model.
The research firm addressed investor skepticism about Charter’s position, noting that while cable companies are expected to lose more than 1 million subscribers in 2025, the rate of subscriber loss should slow. Bernstein expects ARPU (Average Revenue Per User) growth to offset these losses, driving low-single-digit growth in both revenue and EBITDA. The company currently generates $55.22 billion in revenue with an EBITDA of $22.18 billion. InvestingPro data reveals that management has been actively buying back shares to enhance shareholder value.
Bernstein acknowledged concerns about potential EBITDA decline in 2025 but projected full-year EBITDA to grow year-over-year, despite possible margin pressure in the second half due to elevated spending on broadband and mobile customer acquisition.
The firm also addressed investor concerns about Charter’s debt levels, noting that from 2023 to 2025, Charter’s free cash flow was below its interest expense, though this trend is expected to reverse in 2026 as capital expenditures decline.
Bernstein indicated that investors consistently emphasize the need for meaningful deleveraging while maintaining balance between balance sheet strength and share buybacks—an approach that could attract a wider investor base and higher valuation.
In other recent news, Charter Communications announced the suspension of its share repurchase agreement with Advance/Newhouse Partnership. This suspension will take effect immediately after the next repurchase closing date and is intended to remain until the completion or termination of transactions outlined in a Transaction (JO:NTUJ) Agreement dated May 16, 2025, involving Charter, Charter Communications Holdings, LLC, and Cox Enterprises, Inc. Additionally, Charter Communications’ stockholders have overwhelmingly approved the necessary proposals to proceed with the company’s transaction with Cox Communications, with more than 99% of votes cast in favor. In other developments, UBS has lowered its price target for Charter Communications to $355 from $425, maintaining a Neutral rating. This adjustment was made in response to weaker-than-expected second-quarter results. Charter reported a 0.6% year-over-year revenue growth in the second quarter, while EBITDA declined by 0.1% excluding certain items, compared to a 4.8% growth in the first quarter. Residential revenues also saw a decrease of 0.4% during this period.
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