ATUS - Morgan Stanley cable picks have room to move despite lower broadband estimates

Morgan Stanley's look at cable companies following their Q3 earnings season has the firm looking at lowered estimates for broadband subscriber additions - but it says shares have overcorrected in response. In 2020, it notes, the three cablecos it covers added 4.2 million net broadband subscriptions, 50% higher than their previous all-time high - which likely "pulled forward demand and inflated cable's market share." And the slowdown we're seeing now "reflects the unwind of these pandemic related trends to a more normalized level of activity and market share," analysts Benjamin Swinburne, Simon Flannery and team write. Heading into the earnings season, Morgan Stanley's estimates for 2021 net adds were up 5% from January's forecast; today, they're 5% lower. Investors may have to wait until the second half of next year to find some easier year-over-year comparisons, but in the meantime, the firm is encouraged that Q3 net adds this year

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Morgan Stanley cable picks have room to move, despite lower broadband estimates