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On Monday, Benchmark analysts adjusted their outlook on Liberty Broadband (NASDAQ:LBRDA), reducing the price target from $130.00 to $115.00, while still recommending the stock as a Buy. The revision reflects the broader equity market conditions. The company, currently valued at $12.2 billion, has shown strong momentum with a 14.36% return year-to-date. The analysts estimate that Liberty Broadband’s current Net Asset Value (NAV) is discounted by approximately 12% compared to the value of the nearly 34 million shares set to be distributed to shareholders and the estimated worth of the GCI asset after accounting for net debt.
The new price target does not factor in the current value of the 45.6 million Charter Communications (NASDAQ:CHTR) shares that Liberty Broadband owns. This exclusion is based on the expectation that a significant portion of these shares will be sold to eliminate Liberty Broadband’s corporate debt. According to InvestingPro data, the company maintains strong liquidity with a healthy current ratio of 2.12, and its liquid assets exceed short-term obligations. The analysts acknowledge that a mild discount on Liberty Broadband’s stock is justified due to the trading patterns typically seen ahead of media deal closures, in this case, the expected closing date of June 30, 2027, for Charter’s acquisition of Liberty Broadband. The liquidity of Charter’s shares is also taken into consideration in the assessment.
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The Benchmark analysis suggests that the price target adjustment stems from a combination of market dynamics and strategic financial maneuvers planned by Liberty Broadband. The company’s decision to sell a portion of its Charter shareholdings to settle its debt is a significant factor in the re-evaluated price target.
Despite the price target reduction, Benchmark maintains confidence in Liberty Broadband’s investment appeal, as evidenced by the continued Buy rating. The analysts’ commentary indicates that while adjustments have been made due to market and strategic factors, the overall positive outlook for Liberty Broadband remains unchanged.
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