Altice USA initiated with a Sell at Goldman Sachs

Goldman Sachs analyst James Schneider initiated coverage of Altice USA with a Sell rating and $2 price target. The analyst initiated the U.S. telecom services and infrastructure sector and is most constructive on wireless carriers and datacenters. The U.S. telecom industry is in a state of transformation and telecom operators have refocused on their core business after having emerged from a period as conglomerates marked by shareholder capital destruction, the analyst tells investors in a research note. For the first time in a decade, Goldman sees the U.S. wireless operators entering a period where both competitive intensity and capital intensity are moderating simultaneously. It sees this backdrop driving healthier growth and margin dynamics, with potential for significant capital returns and stock re-rating. U.S. towers are unlikely to enjoy the same structural tailwinds they have over the past decade – but “self help” actions could unlock shareholder value, according to the firm. Goldman’s Buy ratings reflect stocks where it believes the market does not fully appreciate the sustainability of growth the company can deliver across the cycle, or where the pace of potential cyclical recovery in fundamentals is being underpriced. The firm’s Sell rating reflect a more negative risk/reward on shares, or areas where it sees downside fundamental risk.