Wunderlich Securities Believes Price Implies Negative Ad Growth For Time Warner

In a report published Thursday, Wunderlich Securities analyst Matthew Harrigan reiterated a Buy rating and $83.00 price target on Time Warner TWX. In the report, Wunderlich Securities noted, “Buy-rated Time Warner (TWX) shares rose 2.3% yesterday off reports that Rupert Murdoch could be interested in acquiring the company through Twenty-First Century Fox (FOX-NR), with Google (GOOG-NR) presented as a bookend possible acquirer. (Time Warner CEO Jeff Bewkes, however, rebuffed the report after the close). The current possibility presents itself off Fox possibly getting near $14bn in proceeds from BSkyB for its European assets. However, the supposed interest does highlight TWX's continued undervaluation, as WSI estimates that the current stock price implies negative 2.5% annual ad growth through 2018 assuming other forecast building blocks, including near double-digit affiliate fee growth, are satisfied.” Time Warner closed on Wednesday at $72.41.