Communications stock Charter Communications (CHTR) wants to be “a better service operator.” To that end, it is set to roll out some new options and some new pricing structures. As far as investors were concerned, though, the new boss looked a lot like the old boss, and shares were barely up in Monday afternoon’s trading.
Charter has likely noticed the negative perception of cable companies of late. The recent appearances of cable companies in South Park, for example, have portrayed them as time-wasting sluggards and outright sadists. This gives a lot of negative perceptions to work through, and Charter thinks it may have the solution with its “first-of-its-kind customer commitment,” a program known as “Life Unlimited.”
The first major part of this new plan focuses on pricing. The 500 Mbps internet plan will now be available for as little as $30 per month. Full gigabit service, meanwhile—once a dream to many—now comes in at $40 per month. However, access to these prices requires cable service or two mobile lines, so the total bill will likely be larger. In a more surprising twist, though, all the taxes and fees and such are baked in. Thus, the pricing is not $30 a month, plus $6 in taxes, plus $2.99 for interchange fees or whatever.
Building Out the Content
Meanwhile, Charter is also building up its content connections, thanks to a recent deal with Warner Bros. Discovery. (WBD). The combined effort will see Warner’s Max platform added to Charter’s lineup of streaming programs, which may help move some of those former cable customers back to a different kind of cable: the broadband cable.
Thanks to the deal, Charter Spectrum TV Select will include Max, with ads, at no additional charge. That will include HBO and Discovery+ content, so that is quite a bit of content for the asking right here. Plus, the deal gives Warner further access to carriage on Charter for its linear networks, which may have been flagging in recent months but are still a substantial part of earnings.
Is Charter Communications a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on CHTR stock based on three Buys, nine Holds, and three Sells assigned in the past three months, as indicated by the graphic below. After a 25.31% loss in its share price over the past year, the average CHTR price target of $368.25 per share implies 8.2% upside potential.
