Goldman Sachs previews US Cable & Wireline 2Q26E: Broadband ARPU and subscriber losses remain key pressure points

Overview

This report from Goldman Sachs previews 2Q26E results for the US Cable & Wireline sector, covering Charter Communications, Comcast, Lumen, Cogent, and Verizon. The core themes are whether broadband ARPU can stabilize, whether FWA and fiber competition will continue to erode the subscriber base, and whether AI infrastructure demand can support strategic revenue growth for wireline companies.

Core views

Goldman Sachs believes investors remain cautious on the cable sector because ARPU lacks a clear bottom and subscribers continue to decline. In contrast, CMCSA has better diversification support from Peacock, Studios, and wireless, making it preferable to CHTR. Although LUMN and CCOI have potential positives from AI infrastructure, PCF, wavelength, and data center sales, the market still needs to see more sustained revenue improvement. VZ remains Buy, with recent announcements affecting FCF rather than adjusted EBITDA.

Analysis framework

The report previews key 2Q26E financial and operating metrics for each company, compares Goldman Sachs estimates with Visible Alpha consensus, and evaluates the results alongside ratings, price targets, valuation multiples, and key risks. The analysis focuses on EBITDA, revenue, FCF, broadband net adds, ARPU, segment revenue, capital expenditures, leverage, and strategic project progress.

Methodology notes

• Valuation methodsEV/EBITDA multiple valuation

  Enterprise value multiple based on EBITDA for the next twelve months plus one year

  The CHTR price target is based on 5.0x NTM+1Y EV/EBITDA, LUMN on 6.1x, CCOI on 8.0x, and VZ on 7.0x. Changes in multiples reflect competitive pressure, business visibility, and industry rerating.

• Valuation methodsSum-of-the-parts

  Segment valuation method

  CMCSA's price target uses segment valuation, with Connectivity & Platforms valued at 4.5x NTM+1Y EBITDA, Media at 5x, Studios at 10x, and Theme Parks at 10x.

• Earnings previewGS estimate vs. Visible Alpha consensus

  Comparison between sell-side estimates and market consensus

  The report compares Goldman Sachs estimates with Visible Alpha consensus to identify items at each company that may exceed or fall short of expectations in 2Q26E.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• CHTR

  Core covered company, rated Sell

  Strengths

  Network upgrades and video product innovation may reduce churn, while rural customers still offer growth.

  Weaknesses

  Strong broadband competitive pressure, continued net subscriber losses and ARPU pressure, and a significant price target reduction.

  Comparison

  Compared with CMCSA, CHTR lacks the stronger non-broadband business diversification buffer.

  Risks

  Competition from FWA, fiber, and satellite broadband; promotions and bundling pressuring ARPU; continued subscriber losses.

• CMCSA

  Core covered company, rated Neutral

  Strengths

  Peacock is expected to become profitable, Studios is performing strongly, wireless momentum is favorable, and business diversification is better than CHTR's.

  Weaknesses

  Broadband net adds remain negative, residential broadband ARPU continues to decline, and theme park demand is under pressure.

  Comparison

  Relatively better than CHTR among cable companies, but the broadband business has not yet shown a sustainable recovery.

  Risks

  FWA and FTTH competition, programming costs, macroeconomic slowdown, an underperforming theatrical slate, regulatory risk, and interest-rate risk.

• LUMN

  Core covered company, rated Neutral

  Strengths

  Strategic revenue, Digital, PCF, and AI infrastructure demand offer growth potential, while the Alkira acquisition may support a long-term revenue inflection point.

  Weaknesses

  Legacy and mass-market revenue continue to decline sharply, and total revenue is down year over year.

  Comparison

  More dependent than cable companies on enterprise AI connectivity demand and validation of a revenue inflection point.

  Risks

  Difficulty achieving cost reductions, structural pressure in the fiber business, intensifying PCF competition, and revenue stabilization later than expected.

• CCOI

  Core covered company, rated Neutral

  Strengths

  Lower network operating expenses support EBITDA, wavelength revenue is growing, and the data center sale improves the deleveraging path.

  Weaknesses

  Capital expenditures remain high, FCF is expected to be negative, leverage remains high, and core revenue improvement still needs to be demonstrated.

  Comparison

  More affected than LUMN by data center asset disposals, wavelength growth, and deleveraging progress.

  Risks

  Slowing revenue growth, wavelength sales below expectations, failure to realize cost savings, and slower-than-expected deleveraging.

• VZ

  Covered company, rated Buy

  Strengths

  The $56 price target is maintained, and adjusted EBITDA expectations are unchanged.

  Weaknesses

  The BT joint venture and related restructuring items reduce near-term FCF estimates.

  Comparison

  Compared with cable broadband companies, VZ retains its Buy rating but requires monitoring of enterprise wireline and Frontier integration risks.

  Risks

  Intensifying wireless competition, higher-performance broadband competition facing FWA, spectrum constraints, deterioration in the wireline business, and difficulties integrating Frontier.

Key data

• CHTR 2Q26E EBITDA$5.55bnApproximately 1% below Visible Alpha consensus of $5.61bn.
• CHTR residential broadband net adds-156kBelow consensus of -133k, reflecting competitive pressure from FWA, fiber, and satellite broadband.
• CHTR residential broadband ARPU$71.04Below consensus of $71.14 and down approximately 30bps year over year.
• CMCSA 2Q26E EBITDA$8.93bnApproximately 1% above consensus of $8.85bn, primarily supported by Peacock and content businesses.
• CMCSA broadband net adds-164kSlightly weaker than consensus of -159k, with the competitive environment remaining intense.
• CMCSA Peacock EBITDA$36mnAbove consensus of $6mn, driven by sports content, with profitability expected during the quarter.
• LUMN 2Q26E EBITDA$772mnApproximately 1% below consensus of $777mn, although the revenue forecast is above consensus.
• LUMN strategic revenue$1.27bn, +12% YoYSupported by hyperscaler demand, PCF, and NaaS growth.
• CCOI 2Q26E EBITDA$79mnAbove consensus of $76mn, supported by lower network operating expenses.
• CCOI data center sale$225mnSale of 10 data centers, with proceeds planned for deleveraging.
• VZ price target$56Unchanged, based on 7.0x NTM+1Y EV/EBITDA.
• VZ FCF adjustmentDown 5% for 2Q26E and down 1% for 2026Reflects the announced formation of an international enterprise business joint venture with BT Group.

Impact & implications

The investment implication for the US telecom services sector is that traditional cable broadband still lacks a clear rerating catalyst, with ARPU and subscriber stability as the key areas to monitor; companies with exposure to content, wireless, or AI infrastructure have relatively stronger defensive or upside narratives, but the positives for LUMN and CCOI still require validation through revenue inflection points and deleveraging progress.

Risks

• Competition in the broadband market may continue to intensify, particularly from FWA, FTTH, satellite broadband, and fiber overbuilders.
• Promotions, free wireless-line bundling, and simplified pricing may continue to pressure ARPU.
• If net cable broadband subscriber losses do not improve, sector rerating may be delayed.
• If AI infrastructure, PCF, and wavelength growth at LUMN and CCOI does not translate into sustained revenue improvement, share price upside will remain limited.
• Lower visibility into CMCSA theme park demand and the future theatrical slate may weigh on segment valuation.
• The VZ-BT joint venture, restructuring costs, and Frontier integration involve execution risks.

What to watch

• Whether CHTR can explain its guidance for residential broadband ARPU to remain flat for the full year and reduce broadband subscriber losses.
• Whether CMCSA's Peacock becomes profitable in 2Q26 as expected, and whether free wireless lines convert into paid lines in 2H26.
• Whether LUMN updates its long-term guidance following the closing of the Alkira transaction, and whether Digital and PCF revenue show a J-curve inflection.
• The pace of deleveraging following CCOI's data center sale, the monetization timetable for the remaining 14 data centers for sale, and when capex pressure will ease.
• The impact of the VZ-BT joint venture on FCF, enterprise business structure, and profit performance after 2027.