UPDATE: Atlantic Equities Downgrades Altice-USA (ATUS) to Neutral
Atlantic Equities analyst Hamilton Faber downgraded Altice-USA (NYSE: ATUS) from Overweight to Neutral with a price target of $13.00 (from $21.00).
The analyst comments "We are downgrading Altice USA to Neutral. We believe management's strategy to address heightened competition through increased investment in fibre is the right one but believe it will take time before results improve materially. Furthermore, we believe Altice is more exposed to competition than other cable operators given it has historically been more aggressive on price and cost-cutting. Given its much reduced market capitalisation, the company could certainly be taken private, but 1) we are always reluctant to recommend companies purely on the basis of potential take-outs and 2) we would have imagined such a move would have come already. We are shifting to an EV/EBITDA multiple valuation as, in our view, FCF multiples do not adequately reflect the risks around a highly leveraged entity (equity is just 20% of EV), particularly in an environment where rates are rising. Our target 2024 EV/EBITDA is 6.5x,,a 1.5 turn discount to the Charter/Comcast average, and our PT comes down from $21 to $13."
For an analyst ratings summary and ratings history on Altice-USA click here. For more ratings news on Altice-USA click here.
Shares of Altice-USA closed at $14.40 yesterday.