Tear Sheet: Charter Communications Inc.

We currently project EBITDA growth of 2%-3% per year through 2024 due to broadband average revenue per user (ARPU) growth, improving wireless economics and modest growth in business services despite limited broadband subscriber growth. We believe rural footprint expansion will help drive subscriber and EBITDA growth because there is no competition from fiber, so customer penetration will likely be above average. We also believe upgrades to the existing network provide a path toward long-term ARPU growth and can help protect existing market share. Importantly, Charter has a clearly communicated a leverage target of 4x-4.5x, so increased capital spending will likely come at the expense of share repurchases, which have been very high in recent years. If business prospects weaken enough

...We believe Charter Communications Inc. can attain low-single-digit percent annual EBITDA growth for the foreseeable future. We currently project EBITDA growth of 2%-3% per year through 2024 due to broadband average revenue per user (ARPU) growth, improving wireless economics and modest growth in business services despite limited broadband subscriber growth. We view Charter's network investments favorably. We believe rural footprint expansion will help drive subscriber and EBITDA growth because there is no competition from fiber, so customer penetration will likely be above average. We also believe upgrades to the existing network provide a path toward long-term ARPU growth and can help protect existing market share. Importantly, Charter has a clearly communicated a leverage target of 4x-4.5x, so increased capital spending will likely come at the expense of share repurchases, which have been very high in recent years. There is less cushion in the rating for operational disruption. If business...

Full Report