KeyBanc Capital Markets Touts WOW And CMCSA, Cautions Patience On CHTR: Analysts Explain Why

KeyBanc Capital Markets on Monday adjusted its ratings on several Cable and Wireless stocks after analyzing first-quarter conferences and engaging in discussions with key investors.

KeyBanc analyst Brandon Nispel believes the near-term setup is most attractive for cable companies due to lower risk estimates, improving macro and competitive data points, and the potential for valuation reversion.

Among the rating changes, Nispel upgraded WideOpenWest Inc WOW and Comcast Corporation CMCSA to Overweight, while downgrading Charter Communications CHTR to Sector Weight.

Check out more analyst ratings here. 

Here’s what the analyst had to say about each stock.

WideOpenWest

Upgrade to Overweight, Price Target: $14

The analyst anticipates WideOpenWest’s return to broadband subscriber growth and progress with Greenfield expansion. The firm expects adjusted EBITDA growth of around 7% in 2024, which is strong compared to peers.

Comcast Corporation

Upgrade to Overweight, Price Target: $44

Comcast's upgrade to Overweight is based on the potential for increased Cable EBITDA margins and a stable capital intensity level. KeyBanc sees over 15% upside to its $44 price target, with share purchases adding around 6% and dividends contributing approximately 3% for a total return of about 25%.

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Charter Communications

Downgrade to Sector Weight

Nispel’s downgrade is due to a lack of visibility in EBITDA margin expansion, higher costs, a lagging network upgrade, increased leverage, and limited free cash flow. The analyst said investors can achieve better exposure through a combination of WOW, CableOne Inc CABO, and Comcast.

Other stocks covered in KeyBanc’s analysis include Altice USA ATUS, Verizon Communications Inc VZ, AT&T Inc T, T-Mobile TMUS, and CableOne.

While Nispel sees various challenges and opportunities for these companies, his overall preference leans towards Cable, with T-Mobile remaining attractive in the Wireless segment.

Read next: Jim Cramer Says GM, Ford Shares Would 'Double' If They Turned In Numbers Like Tesla: 'It's An Amazing Company, Just Own It'

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