Analysts anticipate stable 2024 revenues for Charter Communications, slight dip in EPS projections

It’s been a mediocre week for Charter Communications, Inc. shareholders, with the stock dropping 19% to US$304 in the week since its latest yearly results. Revenues of US$55b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$29.99, missing estimates by 4.7%. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Following last week’s earnings report, Charter Communications’ 22 analysts are forecasting 2024 revenues to be US$55.3b, approximately in line with the last 12 months. Per-share earnings are expected to increase 9.7% to US$34.42. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$55.6b and earnings per share (EPS) of US$36.80 in 2024. So it looks like there’s been a small decline in overall sentiment after the recent results – there’s been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The average price target fell 9.3% to US$407, with reduced earnings forecasts clearly tied to a lower valuation estimate. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Charter Communications, with the most bullish analyst valuing it at US$550 and the most bearish at US$280 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Charter Communications’ revenue growth is expected to slow, with the forecast 1.2% annualised growth rate until the end of 2024 being well below the historical 5.0% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.1% annually. So it’s pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Charter Communications.

The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Charter Communications. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it’s tracking in line with expectations. Although our data does suggest that Charter Communications’ revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates – from multiple Charter Communications analysts – going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we’ve spotted 2 warning signs for Charter Communications (of which 1 is a bit unpleasant!) you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Simply Wall St