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

NEW YORK (TheStreet) -- Time Warner Cable Inc. (TWC) was upgraded to "buy" from "hold" at Wunderlich Securities on Monday.

The firm said it raised its rating on the cable company based on its belief the Timer Warner, Comcast (CMCSA) merger will receive regulatory approval, which will help improve the company's business practices.

Wunderlich upped its price target on Time Warner Cable to $190 from $146.


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 some important positives, 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, increase in net income, revenue growth, growth in earnings per share and expanding profit margins. 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:

  • Powered by its strong earnings growth of 26.86% and other important driving factors, this stock has surged by 27.88% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Media industry average. The net income increased by 19.4% when compared to the same quarter one year prior, going from $401.00 million to $479.00 million.
  • TWC's revenue growth trails the industry average of 12.5%. Since the same quarter one year prior, revenues slightly increased by 2.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TIME WARNER CABLE INC has improved earnings per share by 26.9% 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 ($7.76 versus $6.71).
  • 35.47% is the gross profit margin for TIME WARNER CABLE INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.58% trails the industry average.
  • You can view the full analysis from the report here: TWC Ratings Report
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