Wells Fargo Downgrades Cablevision (CVC) to Market Perform; Being Cheap Just "Isn't Enough" - Swap Into TWC

Wells Fargo downgraded Cablevision (NYSE: CVC) from Outperform to Market Perform with a price target range of $16-$18 (from $20-22).

Wells analyst says, "We had been proponents of the "bull case" that CVC "hit bottom" and is cheap on a FCF basis (trading at an 18.9% yield vs. the peer group, at 12.5% 2012E). However, Friday's news shed some light on our view of CVC - in that we just don’t see a similar catalyst helping CVC get out of its operational rut. Over 40% of CVC's footprint is passed by FiOS, who is likely to remain an aggressive competitor - and even more so as its physical build subsides and it relies primarily on increased penetration. We like Bresnan, but think this is still too small to move the needle. And financial flexibility went out the window with AOCF. We also fear what the closing of the terrestrial loophole could do to CVC from a competitive
standpoint. Currently, we don't see the risk-reward proposition as favorable for CVC as we do for Comcast (Nasdaq: CMCSA) and Time Warner Cable (NYSE: TWC)."

For an analyst ratings summary and ratings history on Cablevision click here. For more ratings news on Cablevision click here.

Shares of Cablevision closed at $15.14 yesterday.

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