Zacks Investment Research upgraded shares of Time Warner Cable Inc. (TWC) from UNDERPERFORM to NEUTRAL on April 11, 2013, with a target price of $99.00.
We upgrade our recommendation to Neutral on Time Warner Cable to Neutral ahead of its first quarter of 2013 financial results. We expect the company to perform well mainly due to: (1) acquisitions of NewWave, NeviSite, and Insight, which have enhanced the company's financials and (2) growing demands for residential high-speed Internet service and Business services segments. Meanwhile, the company continues to lose basic video subscribers without any interruption since 2009. We do not know when this trend will ultimately reverse. Growing competitive threats from telecom, satellite TV and online video streaming operators along with steadily increasing programming costs are taking heavy toll on Time Warner Cable's finances. Unlike rival Comcast, the company is suffering from lack of any media asset. Similarly, unlike DIRECTV, Time Warner Cable is lacking geographical diversification as it operates only within the U.S.
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