- Two analysts downgraded Altice USA Inc (NYSE:ATUS).
- Societe Generale analyst Nick Lyall downgraded Altice USA to Hold from Buy with a $12 price target (8% upside).
- Competition has cut growth and forced management to accelerate the fiber roll-out. While acknowledging that this is a "sensible move," the risks are high, the analyst noted.
- See Altice USA's Acceleration Of Fiber Deployment Strategy
- Also see Altice USA's Q4 Results
- Evercore ISI analyst James Ratcliffe also downgraded Altice USA to In-Line from Outperform with a price target of $15, down from $25 (35% upside).
- The re-rating follows the company's decision to go all-in on fiber with an "aggressive" plan to reach 6.5 million fiber homes by year-end 2025.
- His argument is not that these fiber investments are necessary but "rather that they're fundamentally defensive."
- Racliffe estimates that nearly 4.9 million of the ~5.4 million fiber homes the company plans to build in 2022-25 will be upgrades of the company's existing footprint rather than expansion into new addressable markets.
- Given the long-term nature of the company's investments, and lack of certainty about returns, Ratcliffe is moving to the sidelines.
- Price Action: ATUS shares traded higher by 0.14% at $11.08 on the last check Wednesday.
