Street Calls of the Week
Investing.com -- Bernstein lowered its price targets for major U.S. telecom names as competitive pressures mount across broadband markets, citing sustained subscriber losses at cable operators and the continued advance of fixed wireless access (FWA) and fiber.
The brokerage trimmed its target on Charter Communications (NASDAQ:CHTR) to $350 from $380, while Comcast’s (NASDAQ:CMCSA) target was nudged down to $36 from $37.
Analysts pointed to mounting broadband losses and the expectation that competition from FWA and fiber “are likely to delay recovery and increase marketing costs” for Charter.
Cable has been hit hard as FWA and fiber expand on both ends of the market. Comcast and Charter together shed 550,000 residential broadband subscribers in the first half of 2025, about 160,000 more than a year earlier.
Over the same period, broadband industry growth held steady, driven by fiber and FWA share gains.
“With AT&T soon to be armed with additional spectrum to aggressively expand its FWA offerings, this rate of net adds is unlikely to slow down significantly,” Bernstein analyst Laurent Yoon wrote.
The firm estimated that once AT&T (NYSE:T) fully deploys its new spectrum, Charter and Comcast could each face 20,000 to 35,000 additional broadband subscriber losses per quarter, compounding the pressure on cable.
Fiber remains a major threat, with more than 76 million passings and growing overlap with cable networks. Bernstein expects fiber to capture more than 40% of the market in time, while FWA continues to secure its segment.
That leaves cable squeezed in the middle, under pressure to balance pricing and marketing spend.
While Yoon expects the pace of fiber buildouts to slow eventually as returns diminish, he cautioned that “the impact of FWA will be prolonged for CableCos.”
Satellite broadband, while still a rounding error, was also flagged as a potential long-term source of incremental pressure as technology improves and costs fall.
Despite the downward adjustments, Bernstein maintained that Charter’s fundamentals remain intact, citing stable to growing revenue and EBITDA and a substantial increase in free cash flow as capital spending declines starting in 2026.
Comcast, however, continues to face near-term headwinds, with higher marketing spend required to offset subscriber erosion.
Overall, Yoon believes that competition in U.S. telecom will “intensify further in the foreseeable future,” creating an increasingly challenging environment for cable operators.