What Happened?
Shares of telecommunications and cable services provider Altice USA (NYSE: ATUS) jumped 6.5% in the afternoon session after the New York Department of Public Service approved its Lightpath reorganization plan, a move an analyst at Raymond James called a positive development.
The approval allows for an asset-backed securities transaction. The analyst noted that this was a net positive for the business. This view was based on the belief that Lightpath, a high-quality fiber asset, was valued significantly higher than what was implied in Altice's trading value. The analyst also pointed out that Lightpath experienced solid growth and demand, partly driven by AI and related data traffic. Following the news, Raymond James kept its Outperform rating and $3.50 price target on the stock.
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What Is The Market Telling Us
Altice’s shares are extremely volatile and have had 39 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 6.5% as investors scooped up equities, shaking off the initial concerns inferred from the Fed's dot plot, with tech stocks leading the charge.
As a reminder, the Federal Reserve cut its benchmark interest rate by 25 basis points the previous day and signaled that more reductions could come before year-end and beyond. Initially when the cut was announced and Fed Chair Powell held his press conference, there was a pullback in the market as the Fed's "dot plot" revealed that only one cut was likely for 2026. This was below the three cuts that had been priced into the markets. This was the first interest rate cut of 2025, a move investors had widely anticipated. In response to the decision, stocks rose significantly, positioning major indexes like the S&P 500 and Nasdaq to open at record levels.
The Fed's decision was influenced by signs of a weakening labor market. Lower interest rates are generally seen as positive for stocks because they reduce borrowing costs for businesses and make fixed-income investments like bonds less attractive by comparison, driving capital into the equity market. While Fed Chair Powell noted the path forward has risks, the prospect of looser monetary policy has fueled optimism on Wall Street.
Altice is up 4.4% since the beginning of the year, but at $2.48 per share, it is still trading 20.4% below its 52-week high of $3.11 from January 2025. Investors who bought $1,000 worth of Altice’s shares 5 years ago would now be looking at an investment worth $95.01.
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