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Investing.com - Goldman Sachs has downgraded Altice USA (NYSE:ATUS) to a Sell rating with a price target of $2.00, implying a potential 15% downside from current levels. Trading at $2.34 with a market cap of $1.1 billion, InvestingPro analysis suggests the stock is currently fairly valued.
The investment bank cited ongoing competitive pressures in the broadband landscape, with the regional broadband operator facing challenges from fixed wireless access providers on the low end and fiber services on the high end. This competitive pressure is reflected in Altice’s declining revenue growth of -3.82% over the last twelve months.
Goldman Sachs forecasts 0% EBITDA growth for Altice USA over the next five years (2024-2029), which it believes will limit underlying free cash flow growth and hinder the company’s ability to reduce its debt burden.
The firm noted that Altice USA currently operates at 7.8x net leverage (company defined, based on last two-quarter EBITDA annualized), significantly higher than cable peers Comcast and Charter, which trade below 6x EV/EBITDA on 2026 estimates.
While Goldman Sachs acknowledged that negotiating with lenders to drive meaningful capital structure changes could provide upside to the stock, the firm does not include such developments in its base case scenario.
In other recent news, Altice USA reported its second-quarter earnings for 2025, showing a significant miss on earnings per share (EPS) expectations. The company posted an EPS of -$0.21, which was well below the forecasted -$0.01. However, Altice USA’s revenue met expectations, coming in at 2.15 billion dollars. In addition to the earnings report, TD Cowen lowered its price target for Altice USA from $4.00 to $3.00, citing the company’s significant EBITDA miss, although it maintained a Buy rating. Meanwhile, Altice International is considering an offer for its Israeli business, Hot Telecommunication Systems Ltd., as part of billionaire Patrick Drahi’s ongoing asset sales. A competitor in Israel has reportedly made a bid for Hot Telecom, but specific details about the buyer or the bid’s value have not been disclosed. These developments highlight ongoing strategic and financial adjustments within Altice’s operations.
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