Flowing Cash Drives NTL


UBS Warburg cable debt and equity analyst Aryeh Bourkoff initiated coverage of NTL Inc. with a "buy-2" rating and an $82 12-month price target, adding that the U.K. cable operator is poised to generate significant free cash flow.

Bourkoff believes that NTL, which emerged from bankruptcy in January and recently overhauled its capital structure, will generate about $419 million of free cash flow (cash flow after interest payments and capital expenditures are made) in 2004. That translates into $4.64 per share for a 7.4% yield, compared to a 3% to 5% yield for U.S. cable operators.

NTL also has made major strides in lowering its debt — from $18 billion to $6 billion — and reducing churn, Bourkoff wrote.