Wells Fargo Downgrades Time Warner Cable (TWC) to Market Perform

February 1, 2013 7:34 AM EST Send to a Friend
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Price: $150.88 +1.25%

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    15 Buy, 15 Hold, 0 Sell

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    Up: 20 | Down: 27 | New: 8
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Wells Fargo downgraded Time Warner Cable (NYSE: TWC) from Outperform to Market Perform and lowers its valuation range to $90-95 from $110-115.

The firm comments, "We reduce ests and are downgrading to Market Perform. While Q4 results and the dividend increase were within our expectations, the disappointing
2013 guide led to a pretty big reduction to our 2013 ests. When peeling back the onion, we believe the guide was not muddied by L.A. RSNs (as many had feared), but was instead driven by higher programming costs (NFL Network, Pac-12, NFL Redzone, NWSA and an accrual for CBS, which comes later this year) and lower advertising (due to the lack of high-margin political). Both of these items should have been caught by the Street, so we take a lot of the blame. But at this point, we struggle with the lack of near-term catalysts, and our new ests suggest a range of $90-95 (as determined by our 5-year DCF analysis) vs. our prior $110-115. In terms of ests, we are lowering 2013 EPS to $6.56 from $7.04 (management is guiding to $6.33-6.61) and introducing 2014 EPS of $8.06. Based on conversations with investors, we seem to be more bullish on 2014, but would prefer to see how more of 2013 plays out before we become constructive again."

For an analyst ratings summary and ratings history on Time Warner Cable click here. For more ratings news on Time Warner Cable click here.

Shares of Time Warner Cable closed at $89.34 yesterday.




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Analyst EPS Change, Analyst EPS View, Analyst PT Change, Downgrades

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