Miller Tabak Downgrades Charter Communications (CHTR) to Neutral; Valuation Call After Strong Run

Miller Tabak downgraded Charter Communications (NASDAQ: CHTR) from Buy to Neutral. PT $57 (long-term target $63)

Miller analyst says, "CHTR is currently trading at 7.1x ‘11E EV/OCF and 10.8x ’11 FCF, which are already above and at, respectively, the Time Warner Cable (NYSE: TWC)(Buy-Target $81) current 6.4x and 10.5x multiples. Our target TWC multiples are 6.8x ’11E EV/OCF and 11.7x ‘11E FCF; if CHTR were to trade to our target TWC FCF multiple, its stock would be a $60 stock."

For Q1: "We expect (32)k basic video losses (worse than (23)k in 1Q10 but better than (67)k in 4Q10); +81k digital video net adds (a moderate decline from +96k in 1Q10 but up from +19k in 4Q10) – this product should see better penetration throughout the year as the company focuses on upgrading more set-top boxes and systems to EBIF platforms; data net adds of +88k (down moderately from +104k in 1Q10 but up from +32k in 4Q10); and telephony net adds of +49k (down from +67k in 1Q10 but up from +31k in 4Q10."

For more ratings news on Charter Communications click here and for the rating history of Charter Communications click here.

Shares of Charter Communications closed at $54.81 yesterday.

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