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Charter Communications, Inc. (CHTR) experienced growth across most of 2021, peaking in September 2021 and then declining until January 2022. Charter has underperformed the S&P 500, with the stock rising by about 18.9% compared to the S&P’s gain of approximately 41.8%. The stock slid on the WhaleWisdom Heatmap to a ranking of 30 from 31, and hedge funds have been actively selling shares.

Charter provides broadband communication services through its Spectrum brand, serving customers throughout the United States. Charter offers a range of residential and business services: internet, cable television that also includes original programming, mobile phones, and WIFI connectivity, and voice services that range from hosted voice solutions for remote workers to hosted call centers with call analytics. Charter’s business services are catered to support a variety of sizes and types of companies to deliver broadband products and services that support workforce productivity with highly customizable fiber-based solutions. Charter also sells tailored advertising and production services through Spectrum Reach.

While Charter’s growth over the past two years has been impressive, Charter experienced a slow-down in recent months. As part of the telecommunications industry, Charter saw increased demand for services that support remote and hybrid workforces during the coronavirus pandemic. However, this industry is also people-intensive and subject to productivity burnout and supply chain disruptions for its equipment and mobile technology. These are all challenges that Charter is likely to continue to navigate in addition to fluctuations in internet subscriber growth. Charter’s management will host a webcast on January 28, 2022, to share thoughts on financial and operating results for the year ended December 31, 2021.

Hedge Funds Adjust Portfolios

Hedge funds were selling in the third quarter of 2021, and the aggregate 13F shares held decreased approximately 3.6% to about 43.2 million from 44.8 million. Of the hedge funds, 31 created new positions, 76 added, 18 exited, and 113 reduced their stake. Institutions also sold and decreased their aggregate holdings by about 3.5% to approximately 124.1 million from 128.6 million.


Positive Estimates

Analysts anticipate that earnings will rise through 2022, with an estimated $22.90 for December 2021 and $31.09 by December 2022. Revenue estimates also include healthy year-over-year growth that could bring revenue to approximately $54.4 billion by December 2022. The 13F metrics trend between 2010 and early 2022 shows that Charter has generally followed an upward trend.


Analysts Apply Caution

Analyst John Janedis from Wolfe Research, LLC. lowered Charter to an Underperform rating from a Peer perform rating, anticipating only modest growth across the next few years. Janedis lowered the firm’s price target to $621 from $712. KeyBanc Capital Markets, Inc. analyst Brandon Nispel also lowered the price target to $847 from $869 while maintaining an Overweight rating on shares. Jeffrey Wlodarczak of Pivotal Research Group lowered their firm’s price target to $800 from $1000 but kept a Buy rating on shares. Citigroup Global Markets, Inc. analyst Michael Rollins gave Charter a $643 price target, down from $710. Rollins noted the slowdown in new cable broadband customers and competition in the industry.

Optimism for Future

While 2021 concluded with slower growth for Charter, analysts are optimistic for improved estimates to finish 2022. Investors should stay tuned for the fourth quarter and 2021 year-end financial and operating results. At this time, Charter may have more appeal as a long-term investment.

This entry was posted on Monday, January 17th, 2022 at 8:30 am and is filed under Stock. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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