Argus cuts Charter to Hold, seeing competition hurt subscribers
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Charter Communications (NASDAQ:CHTR) is 2.4% lower Tuesday alongside a downgrade to Hold at Argus, from a previous Buy.
That's due to a surprising user downside from the cableco's recent earnings report.
"While Charter, like other large cable companies, has been losing video subscribers for years due to competition from cheaper streaming services, the company reported a startling decline in Internet subscribers in 2Q22," the firm says.
Charter said that excluding some 59,000 disconnections linked to the end of a low-income subsidy, subscribers would have risen by 38,000. But "even after adjusting for the end of some government programs, Internet net additions were weak," Argus said.
Most companies are attributing a rough season to market conditions, and Charter is no exception there. But Argus notes that "we see increased competition going forward as telco providers expand their broadband plays both though both fiber cable and 5G-enabled fixed wireless access."
Wall Street analysts tend to rate Charter a Buy, and Seeking Alpha authors feel the same way. Meanwhile, Seeking Alpha's Quant Ratings call Charter a Strong Buy, with particular strength in the Growth and Revisions factors.