Bernstein upgrades Charter on improving cash outlook despite broadband headwinds

Investing.com -- Bernstein upgraded Charter Communications (NASDAQ: CHTR) to Outperform, arguing the stock’s post-earnings selloff offers an opportunity ahead of a more constructive 2026 free cash flow narrative.

While Charter’s core broadband business remains under pressure, with 111,000 residential broadband subscriber losses in Q2, Bernstein noted those results were largely consistent with last year when adjusting for disconnects.

“On one hand, the underlying fundamentals remain challenged,” analysts said.

“On the other hand, Charter’s financial narrative is expected to improve in ‘26 and more substantially in ‘27 as Capex declines.”

The firm said that although structural challenges from fiber and fixed wireless access remain, the competitive environment has not materially worsened.

Bernstein cut its price target to $380 from $410 to reflect ongoing broadband weakness, but said FCF yield is set to exceed 10% in 2026 and climb into the mid-to-high teens by 2027 as capex moderates.

That should support continued buybacks, which Bernstein sees as a key driver of upside.

The firm emphasized that while cable may not return to dominance, Charter’s cost discipline and improving cash generation position it well as the industry transitions into a more stable competitive phase.

“In CHTR’s case, growing FCF and continuing cost discipline provide an upside as the industry settles into a more stable competitive equilibrium”

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