Growing competition from fixed wireless will be a challenge for Charter Communications Inc (NASDAQ:CHTR), and as the company works to regaining lost subscribers, fixed wireless access (FWA) is likely to continue to gain share “in coming years,” according to BofA Securities.
The Charter Communications Analyst: Jessica Reif Ehrlich downgraded Charter Communications from Buy to Neutral, while reducing the price target from $740 to $500.
The Charter Communications Thesis: While the company’s rural build could offset some of the share loss, “results will not be a significant driver for some time,” Reif Ehrlich said in the downgrade note.
The analyst expressed concern around:
- Stiffening competition from FWA deployments and accelerating fiber builds “which have emerged as real threats to the company’s broadband subscriber growth”
- The maturing of the U.S. broadband market and overall industry growth likely remaining limited going ahead
- Shares of Charter Communications trade at a premium to peers
- Ramping competition could also impact broadband pricing power
- Video revenue growth remains “relatively flat”
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“Charter’s value proposition to the commercial market has not yet resulted in driving significant small-to-medium business subscriber gains,” Reif Ehrlich added.
CHTR Price Action: Shares of Charter Communications had declined by 1.38% to $426.57 at the time of publication Tuesday, according to Benzinga Pro.
