D.C. Memo: MoffettNathanson Expects Charter Shares to Soar in 2025 as Capex Starts to Slow

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Charter: MoffettNathanson Senior Managing Director Craig Moffett is bullish – make that mega-bullish – on Charter Communications as he expects the stock to hit $660 a share in 2025. That’s an 84% surge after the stock experienced a long slide that began in September 2021. In a client report yesterday, Moffett said Charter’s financial profile will improve for two reasons: Capital spending that soared to reach rural markets will star to ebb after 2025 and broadband subscriber growth will start to turn slightly positive as a result of less competitive pressure from Fixed Wireless Access (FWA) players T-Mobile and Verizon. “As their network upgrade project winds down, and as their pace of rural expansion slows, we expect capital spending will fall,” Moffett said. “We believe the worst of the broadband net add slide has passed. We expect FWA’s growth will slow and the pace of fiber overbuilds will moderate.” The Wall Street analyst expects that over the next four years, Charter will buy back $39 billion of its shares. “Much of that stock will come from Liberty Broadband, which currently holds 32% of Charter’s common shares outstanding,” he said, adding that Charter’s share count will go down by 48%. And, he concluded, that will result “in explosive growth in free cash flow per share.” Charter closed yesterday at $352.77, down 1.53%.