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Friday, Citi analysts resumed coverage on Charter Communications (NASDAQ:CHTR), issuing a Buy rating with a price target of $425.00. According to InvestingPro data, the stock has recently experienced an 8.99% decline over the past week, potentially presenting an opportunity as analysts maintain positive outlook with targets ranging from $273 to $525. The firm highlighted Charter’s potential for accelerated free cash flow (FCF) growth beginning from what is seen as the current trough in 2025. They anticipate this growth will enhance the company’s financial flexibility, potentially enabling the resumption of share repurchases.
The analysts noted that despite the expected annual loss of broadband subscribers due to increasing fiber coverage and fixed wireless access (FWA) market share gains, Charter is actively countering the competition. The company is marketing new service commitments, converged rate plan bundles, modernized video solutions, enhanced broadband performance, value pricing for mobile services, and faster expansion of its network footprint, including Rural Digital Opportunity (SO:FTCE11B) Fund (RDOF) passings.
Charter’s stock is currently trading at a free cash flow yield of approximately 8% based on Citi’s 2026 estimates. The company currently generates $55.09 billion in revenue with an EBITDA of $21.89 billion. Analysts project that the company’s free cash flow per share (FCFPS) will more than double by 2028, reaching around $65.00. They also pointed out that Charter’s enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) is trading at 6.4x on their 2026 estimates, with the potential to maintain low-single-digit annual EBITDA growth. InvestingPro analysis suggests the stock is currently undervalued, with 4 analysts recently revising their earnings estimates upward for the upcoming period.
The firm’s positive outlook is partly based on the belief that Charter will maintain strategic flexibility if the telecommunications category undergoes further consolidation. The analysts’ projections and the current trading multiples suggest confidence in Charter’s long-term financial performance and market position. For deeper insights into Charter’s valuation and growth potential, including access to comprehensive financial health scores and additional ProTips, explore the full analysis available on InvestingPro.
In other recent news, Charter Communications reported strong fourth-quarter 2024 results, surpassing earnings expectations with an earnings per share (EPS) of $10.1, exceeding the forecasted $9.29. The company also reported a slight increase in revenue, reaching $13.93 billion, which was above the anticipated $13.88 billion. Charter’s net income rose to $1.5 billion from $1.1 billion the previous year, with its mobile segment contributing significantly by adding over 2 million lines. In terms of analyst ratings, Bernstein maintained an Outperform rating on Charter, with a price target of $385, noting a smaller-than-expected loss of broadband subscribers. The analysts emphasized Charter’s wireless segment growth and potential mergers and acquisitions as areas of interest. Charter’s management expressed confidence in their strategy, focusing on organic growth without relying on mergers and acquisitions. The company plans to invest approximately $12 billion in capital expenditures for 2025, with a focus on network expansion and AI-powered customer service tools. Despite industry challenges, Charter continues to demonstrate resilience and strategic growth in its operations.
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