Morgan Stanley Increased TWC PT To $78

Morgan Stanley has issued a report raising the Price Target on Time Warner Cable

from $74 to $78 a share. Morgan Stanley writes, “Our higher price target is based on the assumption TWC reaches a ~3.25x debt leverage target by YE'12 through share repurchases ($3.9B and $3.6B in ‘11E and ‘12E) and dividend growth. Given TWC's ~6.0% average cost of debt and implied FCF yield of TWC's equity, the increased repurchase activity relative to our prior estimates raises long-term equity value.” TWC is rated Equal-Weight and closed at $72.80 a share yesterday.