Altice USA Inc (ATUS)

Altice USA Inc (ATUS) stock fell by 5.06% after Wells Fargo downgraded the stock from Equal-Weight to Underweight and reduced its price target from $2 to $1. The downgrade was based on concerns about increased competition from fiber-optic networks, which could pose a threat to Altice's high-speed internet business.

• Reasons for Downgrade: According to Wells Fargo analyst Steven Cahall, the expansion of fiber-optic networks in recent years is gaining momentum, coinciding with a slowdown in fixed wireless access net additions. Cahall believes that fiber-optic networks are a more significant and enduring threat to high-speed internet service providers like Altice USA.
• Market Reaction and Acquisition Speculation: Altice USA's stock price dropped further in premarket trading following the downgrade. Despite reports of a potential acquisition by Charter Communications, Cahall believes a merger is unlikely due to Altice being a controlled company. He stated that the market may be overly optimistic about the possibility of a transaction and that only a take-under deal would be accretive for Charter, even with an estimated $1 billion in synergies.

Shares of Alice USA Inc. (ATUS) dropped by 3.77% from $2.39 to $2.30 in the trading on Wednesday, November 22, 2023. The reason why ATUS is down today is due to Alice USA agreed to sell a 70% share in its data centre unit to a Morgan Stanley Infrastructure fund. The transaction involves a substantial sum of €535 million ($586 million) and includes 257 data centers and office space previously associated with Altice's carrier SFR.