Morgan Stanley (NYSE: MS) analysts raised their price target on Time Warner Cable (NYSE:TWC) to $54.00 while maintaining their “equal-weight” rating on the stock.
Morgan Stanley analysts Benjamin Swinburne, David Gober and Ryan Fiftal wrote, “While TWC trades at a modest premium to large cap cable peer CMCSA, we believe a premium is warranted and sustainable, as TWC benefits from being a pure-play cable operator with a disposition to return capital to shareholders. While we see absolute upside to TWC, we prefer DTV ($36.16) and CVC ($25.53) in the US Pay-TV space, where we see higher organic growth. Much of the debate on TWC from here surrounds further return of capital plans beyond its existing dividend. We do not believe the company will revisit its dividend in 2010, but instead will de-lever while exploring horizontal and commercial telecom acquisition opportunities.”
Morgan Stanley predicts fiscal 2010 earnings per share of $3.74 and fiscal 2011 earnings per share of $4.14.
