Wells Fargo Resumes Charter (CHTR) Coverage with Equal Weight Rating

Charter Communications, Inc. (NASDAQ:CHTR) is one of the best long-term stocks to invest in according to Warren Buffett. On August 21, Wells Fargo resumed coverage of Charter Communications with an “Equal Weight” rating and set a price target of $300. Wells Fargo noted that despite tough conditions in the cable industry, Charter is the “strongest performer” among its competitors. This is due to its early and aggressive approach to its subscriber strategy, which has helped it maintain a strong market position. The company generates significant annual revenue of $55.22 billion.

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Wells Fargo values Charter at an enterprise value-to-EBITDA (EV/EBITDA) ratio of 5.9x, which is higher than that of its rivals, such as Comcast’s (NASDAQ:CMCSA) Cable & Platforms business, at 5.3x. This premium is justified by Charter’s better subscriber trends and potential for EBITDA growth. The actual EV/EBITDA for Charter is 6.14x.

The analysts valued Cox, another company in the industry, at the same 5.9x EV/EBITDA multiple, resulting in an enterprise value of about $32 billion. This is slightly below the $34.5 billion mentioned in deal documentation, with Wells Fargo noting a reduction in Charter’s equity value.

Charter Communications, Inc. (NASDAQ:CHTR) is a telecommunications and mass media company. It provides broadband internet, video, mobile, and voice services to residential and commercial customers across the United States under the Spectrum brand. The company also offers advertising and news programming through Spectrum Reach and Spectrum Networks.

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Disclosure: None. This article is originally published at Insider Monkey.