Analyst: Charter offers ‘cleaner, pure-play strategy with a longer operational runway’ compared to Comcast

Charter headquarters building
Image: Charter

With North American investment analysts still unhappy with Comcast’s $31 billion bid for U.K. satellite TV company Sky, Charter Communications has been billed by at least one analyst as a better stock purchase. 

“Relative to Comcast, Charter offers a clean, pure-play strategy with a longer operational runway,” Macquarie analyst Amy Yong wrote in a note to investors this morning. 

Certainly, Charter shares have become more affordable, down 10.4% year to date, compared to a 0.7% decline for the broader S&P 500. 

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Additionally, Yong’s bullishness stems from the fact that Charter’s integrations of Time Warner Cable and Bright House Networks are finally at the finish line, “establishing a clean base for 2018,” she said. 

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She predicts this will result in Charter reporting less year-over-year subscriber churn on April 27 when it reports first-quarter earnings. 

“This could offset the impact of competition from Fios on the back of the Altice/Starz dispute as well as AT&T’s DirecTV Now promo in New york City,” Yong said.

She predicted video losses for Charter of around 31,000 and high-speed internet gains of 330,000 in the first quarter. 

Noting video initiatives that include the final digitization of the TWC and Bright House footprints, the rollout of World Box and the launch of streaming service Choice, Long added, “We expect operational momentum will continue throughout the year.”

Yong’s bullish report comes as Charter gets a respite from SoftBank acquisition chatter. SoftBank is reportedly back in merger talks with T-Mobile. However, if the Japanese conglomerate once again fails to merge its Sprint asset with T-Mobile, there is no reason to suspect that it has given up on the No. 2 U.S. cable company.

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