Truist stated that oversold conditions are a good time to place a bet on Comcast and Charter Communications shares. Analyst Greg Miller upgraded Charter shares to buy from hold with respective $550 and $50 price targets. He stated that the recent investor flight has caused a valuation reset. He wrote that these two stocks were the worst performing large-cap stocks within our coverage universe for 2022, as investors realized broadband flow trends fundamentally changed. But we believe efforts are being successful and should once again allow the stocks to trade with traditional premiums to telecom stocks. Miller stated that investors’ concerns about increased competition are now being accounted for in both stocks. This should allow for limited downside moving forward. Investors are now coming to terms with new variables (fixed wireless, fiber) that have contributed to the poor performance of the cable industry. This is in contrast to a year ago, when investors believed that the only problem facing the sector was the pandemic demand and lack of residential movement in the US. [high speed data] He wrote: “Growth.” Comcast and Charter saw sharp declines in 2022, with their respective shares falling by 30% and 48%. Truist’s new price targets suggest a 37% and 55% increase in prices from Wednesday’s close. Comcast shares rose more than 1% premarket while Charter gained 1% due to light volume. “With relatively attractive valuation (both CMCSA and CHTR share are now trading at a discount to AT & T, Verizon and T-Mobile), combined with the prospects for positive broadband net subscriber additions again in 2023 (both CMCSA and CHTR), we find the stocks to be oversold,” Miller wrote. — CNBC’s Michael Bloom contributed reporting Disclosure: CNBC is owned by Comcast’s NBCUniversal.
Buy these broadband operators after valuations took a hit, Truist says
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