Buy Rating on Liberty Broadband: Strategic Stake in Charter and Anticipated Merger with Cox Drive Optimism
Citi analyst Michael Rollins has initiated a Buy rating on Liberty Broadband (LBRDK), citing its strategic stake in Charter Communications and the anticipated merger with Cox. Rollins highlights the discounted valuation of Charter shares, potential for accelerated free cash flow, and enhanced shareholder returns as key reasons for optimism. Despite risks like Charter's financial performance, Rollins appreciates Charter's focus on product offerings, customer experience, and cost efficiency, positioning it for solid financial performance and free cash flow improvements.
Liberty Broadband (LBRDK) has received a new Buy rating, initiated by Citi analyst, Michael Rollins.
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Michael Rollins has given his Buy rating due to a combination of factors, primarily focusing on Liberty Broadband’s significant stake in Charter Communications. The divestiture of its GCI business has streamlined Liberty Broadband’s assets, with its value now largely tied to its approximately 29% ownership of Charter. The anticipated merger between Charter and Cox, expected to close by mid-2026, further solidifies this strategic position.
Rollins highlights the discounted valuation of Charter shares as a key reason for the Buy rating, along with the potential for accelerated free cash flow generation and enhanced shareholder returns. Despite potential risks, such as Charter’s financial performance falling short of expectations, which could necessitate further debt reduction and impact share repurchases, Rollins remains optimistic. He appreciates Charter’s strategic focus on improving product offerings, customer experience, and cost efficiency, which positions the company well for solid financial performance and significant free cash flow improvements in the coming years.
