UPDATE: Sterne Agee Initiates Time Warner at Buy Ahead of Time Spinoff

In a report published Thursday, Sterne Agee analyst Vasily Karasyov initiated coverage on Time Warner TWX with a Buy rating and $73.00 price target.

In the report, Sterne Agee noted, “We are initiating coverage of TWX shares with a Buy rating as we expect the stock to outperform the group. We think the P/E will expand as the spinoff of Time Inc. approaches, driving the stock price to $73, 28% above the current level. The evolution of NWSA's relative P/E multiple since announcing the separation of its publishing assets as well as our sum-of-the-parts analysis both support our thesis.”

Time Warner closed on Thursday at $56.16.