UPDATE: Morgan Stanley Reiterates Overweight Rating, Raises PT on Time Warner Cable
In a report published Monday, Morgan Stanley reiterated its Overweight rating on Time Warner Cable (NYSE: TWC), and raised its price target from $110.00 to $113.00.
Morgan Stanley noted, “We are raising our PT to $113 as the recently announced modem lease fee drives an upward revision to our estimates. We now forecast TWC to grow '13 EBITDA at the high end of peers, compared to the low end prior (Exhibit 1), on what we believe are still conservative assumptions. Our OW thesis continues to be based on 1) management's capital allocation discipline, 2) above consensus EPS for '13, and 3) TWC as the best way to play the U.S. consumers' growing data usage (wired & wireless/wifi) and cable's advantage over DSL. Our $113 YE13 PT implies TWC's fwd FCF yield holds relatively constant at 9% (disc. to peers). Catalysts include rising buybacks in 2H12 and an expected dividend hike of 10%+ in '13.”
Time Warner Cable closed on Friday at $96.86.
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