CMCSA shines in new tax regime, CHTR positive, ATUS faces issues
We are updating cable estimates (Comcast, Charter and Altice USA) for the new tax regime. As an essentially full tax payer, it's no surprise that Comcast comes out best. Charter also fares reasonably well but our calculations suggest Altice USA may need to rule out share buys/dividends to meet interest deductibility rules. CMCSA 2020 EPS goes up by ~17%, CHTR 2020 FCFPS goes up by 5-10% while ATUS is down ~7% as we take buy backs out of our model. Taking a snapshot of 2020 gives an incomplete picture for CHTR where NOLs are quickly running out. In fact, valuing CHTR on a multiple of fully taxed FCFPS and adding back the NPV of NOLs delivers a ~15% uplift.Charter Communications is a holding company. Through its subsidiaries, the company is a cable operator and a broadband communications company providing video, Internet and voice services. The company also provides its mobile service to residential customers. In addition, the company sells video and online advertising inventory to local, regional and national advertising customers and communications and managed solutions to enterprise customers. The company also owns and operates regional sports networks and local sports, news and community channels. The company owns and operates a two-way telecommunications network which passes various households and small and medium businesses across United States.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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