Charter Communications (CHTR) is likely to face continued broadband subscriber losses, weak pricing, lower earnings, reduced buybacks and pressure to cut costs, while the planned Cox deal could create room for a larger restructuring, RBC Capital said in a note Monday.
RBC now expects Charter to lose 473,000 broadband customers in 2026 and 453,000 in 2027, up from its previous loss estimates of 425,000 and 405,000, respectively, with broadband subscriber losses to remain a long-term issue as fiber and fixed wireless competition grows, as Charter is expected to potentially lose about 2 percentage points of market share each year.
Charter may need major cost cuts in the coming months as revenue remains under pressure and expenses rise, with a broader cost program likely after the Cox deal closes, RBC added.
The Cox deal is expected to to close in mid-to-late August without major problems and potential for cost savings beyond planned synergies, including removing overlapping positions, according to the note.
RBC kept its sector perform rating cut its price target to $150 from $160, saying it expects Charter's stock buybacks to stay below past levels as the company deals with weaker earnings before interest, taxes, depreciation, and amortization, and focuses more on reducing debt after the Cox transaction.
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