Analyst Note| Michael Hodel, CFA |
Charter posted modestly disappointing customer growth during the first quarter, but the general trajectory of the business remains well within our expectations. Slower customer growth provided a nice lift to margins and cash flow, but management clearly expressed that it would have gladly invested more in customer acquisition if additional opportunities were present. The firm expects increased customer activity in the second half of the year as the pandemic eases. We’re increasing our fair value estimate to $565 from $545, primarily reflecting cash earned during the quarter. We continue to view Charter shares as overvalued, preferring Comcast among U.S. cable stocks.