BTIG analyst Richard Greenfield earlier today formally launched coverage of Time Warner Cable (TWC) with a Buy rating, while starting Comcast (CMCSA) and News Corp. (NWS) at Hold ratings.
A few details:
- Time Warner Cable: Greenfield has a $70 price target on the stock, which yesterday closed at $55.11. “Time Warner Cable�s free cash flow has positively surprised us over the past year, more than compensating for weaker RGU growth,” he writes. The analyst notes that video ARPY growth is accelerating, and strong commercial growth is becoming more relevant to overall results. He expects earnings and cash to beat consensus estimate for the coming year.
- Comcast: Greenfield thinks the cable giant’s shares are cheap, but says the NBC Universal acquisition will add complexity and greater regulatory risk. “ Comcast is essentially recreating Time Warner (TWX),” which just got rid of both AOL and its cable arm. He cautious that NBC will be a lot of work for Comcast management, and will distract management their focus on the core cable business.
- News Corp.: The analyst says the stock remains cheap, at just 5x calendarized 2011 EV/EBITDA, and 13.5x 2011 free cash flow. But he says the stock is unlikely to move much in the near-to-intermediate term. Greenfield thinks the company will likely pursue the acquisition of the the 61% of BSkyB that it doesn’t already own, but cautions that investors could be disappointed in such a move, even if a deal is meaningfully accretive to earnings.
In today’s trading:
- TWC is off 34 cents, or 0.6%, to $54.77.
- CMCSA is off 31 cents, or 1.7% to $18.02.
- NWS is off 34 cents, or 2.2%, to $15.23.
No comments:
Post a Comment