Deutsche Bank Starts Charter Communications (CHTR) at Buy

Deutsche Bank initiated coverage on Charter Communications (NASDAQ: CHTR) with a Buy rating and a price target of $225. Analyst Bryan Kraft called the stock his top pick in the cable & satellite sector and noted attractive valuation relative to growth.

"We believe pro forma Charter will have industry leading top line growth, margin expansion, and declining capital intensity (after 2017); which will translate into industry-leading equity returns when combined with CHTR's levered capital structure and tax assets. We estimate CHTR's stock could reach $400 in 2020 based on our pro forma forecast, which is more conservative than management's preliminary forecast in the S-4," said Kraft.

"Pre-merger CHTR became the fastest growing cable company in 2014, growing Adj. EBITDA by 8.7%, despite Charter being sub-scale across many of its geographic markets. The transformation of Charter into a truly scaled player will facilitate the continued turnaround in both Charter and Time Warner Cable from a subscriber perspective; plus add significant opex and capex synergies, create new revenue opportunities in business services and potentially wireless, allow the company to invest more in technology and product development, and create additional value through the company’s tax assets," added the analyst.

For an analyst ratings summary and ratings history on Charter Communications click here. For more ratings news on Charter Communications click here.

Shares of Charter Communications closed at $177.39 yesterday.

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