Analyst Note| Michael Hodel, CFA |
Charter echoed the same sentiments as its cable peers, arguing that the slowdown in customer growth over the past few quarters isn’t related to increased competition. While we agree in part, we expect competitive pressure will remain stronger in coming years than it’s been in the past. However, we also believe the market has overreacted to the prospect of slowing growth across the three cable firms. After reviewing Charter’s first quarter results, we’ve modestly reduced our growth expectations, moving our fair value estimate to $610 per share from $640. While we prefer Comcast given its strong balance sheet, we like Charter at the current share price as well.