Charter Communications, Inc. (NASDAQ:CHTR) shares traded eight percent higher at one point in time on speculation of a possible bid from Verizon Communications Inc. (NYSE:VZ). Following the rumor, S&P Capital IQ analysts Amobi boosted the price target by $85 to $350 on Charter Communications shares.
The analyst’s price objective was based on 2017 enterprise value/EBITDA of 10.6X, with a considerable $11.5 billion of carry forward net operating losses. Amobi also trimmed his EPS estimate by 41 cents a share to $5.27 for the year 2017. The brokerage established its EPS view of $8.51 for the year 2018.
In his research note, the analyst told his clients that “CHTR is up 8% on speculation of a potential bid from Verizon (VZ 49***), per an unconfirmed WSJ report. After its transformational ’16 deal for Time Warner Cable (and given John Malone’s Liberty Broadband stake), it’s not immediately apparent to us why CHTR could mull a potential sale. Still, we note Verizon rival AT&T’s recent deal for DirecTV. Q4 report is set for 2/16. “
The brokerage retained its Hold rating on Charter Communications shares.
At last check, Charter Communications traded up 6.65 percent while Verizon Communications shed 1.15 percent.