Will This Upgrade Help Time Warner Cable (TWC) Stock Today?

Story updated at 10 a.m.to reflect market activity.

NEW YORK (TheStreet) -- Time Warner Cable (TWC) was upgraded to "outperform" by Wells Fargo Wednesday.

Time Warned Cable gained 0.5% to $134.83 in morning trading.

Wells Fargo analysts said the company's stock is attractively valued at the moment based on the pending Comcast (CMCSA) merger.

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Separately, TheStreet Ratings team rates TIME WARNER CABLE INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate TIME WARNER CABLE INC (TWC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, good cash flow from operations, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 43.08% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TWC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.0%. Since the same quarter one year prior, revenues slightly increased by 1.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has increased to $1,599.00 million or 13.40% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.57%.
  • The gross profit margin for TIME WARNER CABLE INC is rather high; currently it is at 53.77%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.68% trails the industry average.
  • TIME WARNER CABLE INC has improved earnings per share by 12.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TIME WARNER CABLE INC reported lower earnings of $6.71 versus $6.91 in the prior year. This year, the market expects an improvement in earnings ($7.65 versus $6.71).
  • You can view the full analysis from the report here: TWC Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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