JP Morgan Calls Time Warner Cable A Top Cable Pick For Next Year

• Shares of Time Warner Cable Inc TWC have been volatile in the last six months and are up 2 percent since June 11.
• JP Morgan’s Philip Cusick maintained that Time Warner remains the top cable pick for 2016.
• Time Warner continues to be operationally strong and focused on improving its customer service, Cusick stated.

A recent meeting with Time Warner Cable’s COO Dinni Jain revealed that the company continues to be operationally strong and is continuously working to improve customer service and satisfaction. Analyst Philip Cusick mentioned that Time Warner remains “our top cable pick for 2016.”

The company is continuing to focus on improving customer call volume and has successfully reduced incoming customer call volume through the simplification of the residential offering, decommissioning non-essential projects and avoiding introduction of new complexities into the network, Cusick noted.

Time Warner Cable is currently focusing on the continued reduction of its churn rates and the rollout of its TWC Maxx project, the code name for going all-digital. The project has already been implemented in certain areas like LA and NYC and is expected to be completed by 2018.

“By going all-digital TWC is able to reclaim bandwidth and increase top broadband speeds to 300Mbps from 100Mbps and base broadband speeds to 50Mbps from 25Mbps,” the JP Morgan report mentioned, while adding that the company has deployed cost-efficient DTAs for its all-digital rollout.

Although unlikely, in case Time Warner Cable’s the deal with Charter Communications, Inc. CHTR falls apart, shares of both the companies are expected to suffer, especially considering the significant regulatory breakup fee, Cusick commented.

“[We] would recommend CHTR investors swap to TWC stead at today’s levels to take advantage of the 9.1% deal spread,” the analyst added.