Charter Communications (CHTR) PT Raised to $456 at Citi; Stock Can Go Higher Even Without M&A

(Updated - August 22, 2017 8:24 AM EDT)

(updated to add analyst comments)

Citi analyst Jason Bazinet raised his price target on Charter Communications (NASDAQ: CHTR) to $456.00 (from $378.00) while maintaining a Buy rating, saying even without M&A the stock can appreciate.

Bazinet suspects about 30% of the share price appreciation is due to M&A speculation. That said they see plore three scenarios that could push CHTR shares higher without it: Viacom renewal, and multiple expansion.

The analyst said tax reform is worth $86 per share. If Charter drops Viacom, they see up to $35 of upside per Charter share. Third, they currently carry Charter at 17x 2019 FCF per share, or $358. But, by 2019, each point of multiple expansion on levered FCF is worth $20 per share.

These scenarios suggest a price of $498 a share: $357 base case + $86 for tax reform + $35 for Viacom + $20 if Charter fetches the same multiple as the market.

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