Deutsche Bank Downgrades Altice USA, Charter Citing Competitive Environment

Deutsche Bank analyst Bryan Kraft downgraded Altice USA Inc ATUS to Hold from Buy with a price target of $22, down from $40, implying 25% upside.
Cable stocks over the past few years have enjoyed a favorable environment, Kraft noted. The stocks benefitted from strong broadband subscriber growth, a relaxed competitive environment, margin expansion from product mix shift and pricing power, and declining capital intensity as network investment needs remained relatively stable.
However, the period of favorable conditions for the cable industry "is now transitioning to a more competitive environment," says the analyst.
As a result, Kraft downgraded both Charter Communications Inc CHTR and Altice USA to Hold.
Kraft downgraded Charter to Hold from Buy with a $725 price target (suggesting 4.7% upside), down from $825.
Price Action: ATUS shares traded lower by 3.28% at $17.52, while CHTR is down 0.50% at $691.72 on the last check Tuesday.