NEW YORK — One prominent media industry-focused financial analyst has given his strong endorsement of Friday’s multi-billion deal that will see Charter Communications acquire Cox Communications, take on the Cox name, and integrate the Spectrum MVPD brand into the combined company.
For Jeffrey Wlodarczak, CEO and the Pivotal Research Group Internet, Media, Sports & Communications Analyst, the tie-up is a “no brainer deal” — one that merits an increase in the target price of Charter stock to $600, from $540 per share.
With a total enterprise value of $34 billion, this implies a “very attractive valuation” of 6.44 times Cox’s 2025 EBITDA and a deal that will likely accelerate growth.
Importantly, it puts the “new Cox” past Comcast, which has a “Buy” rating from Pivotal, in terms of customers.
And, says Wlodarczak, Cox’s properties are “well upgraded,” and with low leverage there is plenty of upside for investors.
What does Wlodarczak have to say about those who argue Cox is selling too low and perhaps near the bottom in cable valuations? “They also are getting into Charter stock (the Cox family will own 23% of Charter stock upon deal close) at an attractive price and therefore materially participates in the upside (a win win for everyone involved in our view).”
