Cord cutters and the changing way Americans watch TV programming are spurring RBC Capital Markets to downgrade the nation’s two most dominant cable companies.
The analysts are citing dropping subscriber numbers that don’t have as much to do with the individual companies as their overall business.
“We are taking a more cautious view on cable sector fundamentals and see potential negative sector catalysts weighing on sentiment as we move through 2019,” Maral wrote in a note to investors.
RBC highlighted concerns about the sustainability of earnings growth in the sector when it's tied to cable connectivity, which is dropping.
While getting more cautious, RBC isn’t cutting the cord completely on the cable companies. Maral noted Charter has had good execution and “strong balance sheets that position it well in a potential downturn.”
Similarly, Cahall argues Comcast is likely to outperform most of the cable market in a recession with connectivity that’s more resilient than many competitors.
Comcast shares were down 1.5 percent at $39.81 at publication time Friday. Charter's stock was down 1.7 percent at $346.71 per share.
Raymond James: Charter's Fee Cash Flow Will Rise On Declining Capex
Comcast NBCUniversal To Launch Streaming Service In 2020: What You Need To Know
Latest Ratings for CMCSA
|Mar 2019||RBC Capital||Downgrades||Outperform||Sector Perform|
|Nov 2018||Morgan Stanley||Reinstates||Overweight|
|Oct 2018||Credit Suisse||Upgrades||Neutral||Outperform|
View More Analyst Ratings for CMCSA
View the Latest Analyst Ratings
See more from Benzinga
- America's Car-Mart Shares Rev As Buckingham Takes Bullish Stance
- KeyBanc Raises Lennar's Price Target On Housing Market Optimism
- Opening Day Fever: Harper, Trout Ready To Get MLB Season Started After Signing Record-Breaking Contracts
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.