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Altice USA rises as Goldman Sachs adds cable and broadband provider to its conviction list

The company's valuation is deemed attractive as it heads toward a spin-off from its French parent

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Analysis indicates Altice USA is "well-positioned to drive top- and bottom -line growth"

Altice USA Inc. (NASDAQ:ATUS) shares are higher on word that Goldman Sachs has added the provider of broadband communications and video services to the investment firm's conviction list.

In mid-morning trading, Altice was up 4% to US$20.71 a share.

According to MarketWatch, Goldman Sachs analysts see Altice's valuation as attractive as it heads toward a spin-off from French parent Altice N.V.

"Our analysis indicates Altice USA is well-positioned to drive top- and bottom -line growth as the sector evolves owing to the material investments it is making in product enhancements, and the operator's proven track record at driving margin expansion through its cost-conscious operating model," Goldman Sachs analyst Brett Feldman wrote in a note to investors, according to MarketWatch.

Feldman wrote that Altice is trading at a steep discount relative to Charter Communications Inc. (NASDAQ:CHTR), its closet peer in the U.S. cable landscape, and other companies in the telecom sector, which indicates "the market is not factoring in Altice's materially higher earnings before interest, tax, depreciation and amortisation and its higher conversion of EBITDA into free cash flow."

Altice is expected to complete the spin-off from its parent during the second quarter.

Quick facts: Altice USA Inc.

Price: 23.25 USD

NYSE:ATUS
Market: NYSE
Market Cap: $13.8 billion
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