KeyBanc cuts rating on Charter after Q3 results stoke fears about broadband growth

[Charter Spectrum Phone, Cable TV, and Internet telecommunications service van is driving to performing a service call - San Diego, California, USA - 2020]
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KeyBanc Capital Markets downgraded Charter Communications (CHTR [https://seekingalpha.com/symbol/CHTR]) to "sector weight" from "overweight" following its weak third-quarter results.

Shares of the company are down more than 5% in early open market trading on Monday.

The research firm noted that the company missed expectations for all residential revenue figures, adjusted EBITDA, and broadband/wireless net adds in Q3, while highlighting that broadband subscriber growth has underperformed, despite changes in go-to-market and pricing/packaging.

They think broadband subscriber growth might not get any better from here, and if subscriber declines accelerate, the FCF trajectory won't matter.

"While we see potential for more capital spending declines thereafter, we believe investors are unlikely to value this FCF with a high multiple unless it is accompanied by broadband subscriberand adj. EBITDA growth, which we are no longer expecting," the research firm said in its note dated November 2.

"Broadband results, paired with less opex efficiency than we envisioned, are leading us to believe EBITDA is likely to go negative for the next couple of years vs. our prior expectations of LSD growth," they added.

KeyBanc is also worried that Charter doesn't have many options and could see its underlying broadband trends "continue to deteriorate without a clear floor," as rival telecom firms continue with their fiber builds and FWA expansion.

CHTR currently does not have a price target from the research firm.

MORE ON CHARTER COMMUNICATIONS

* Charter Communications, Inc. 2025 Q3 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4836486-charter-communications-inc-2025-q3-results-earnings-call-presentation]
* Charter Communications, Inc. (CHTR) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4836331-charter-communications-inc-chtr-q3-2025-earnings-call-transcript]
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