Charter Communications stock still looks cheap on valuation checks despite fresh financing news for its planned US$34.5 billion acquisition of Cox Communications. The company trades at a P/E of 3.7x, far below the Media industry average of 23.1x and its tailored fair P/E of 17.2x, and screens as undervalued in five of six Simply Wall St measures. The bull case sees the stock as 48% undervalued, citing expected cost savings of 800 million to 1 billion dollars from the Cox deal, while the bear case argues it is 24% overvalued due to persistent broadband subscriber losses and competition from 5G and fixed wireless access. The heavy use of new and refinanced debt for the acquisition adds balance sheet risk if cash flows do not develop as expected.
Charter Communications IncArticle discusses valuation and financing for Cox acquisition, with mixed bull/bear cases.
