You Say Potato …


Pali Research media analyst Richard Greenfield continued his dissection of Time Warner Cable last week — he has had a “sell” rating on the stock since July — issuing a cautious report on the ongoing battle for Manhattan customers with Verizon Communications' FiOS TV product.

In the note, Greenfield reduced his 2009 financial estimates and his price target on Time Warner Cable stock to reflect a more rapid decline in 2009 advertising revenue (down 8% vs. down 3%); higher programming expenses and higher marketing costs associated with the FiOS competition.

Greenfield, who has been critical of TWC's response to the FiOS threat in the past, dropped his $13.50 price target on the stock to $10, equal to just under 5 times 2009 estimated cash flow.

But while Greenfield continues to beat on Time Warner Cable, the stock is another top analyst's top pick for the year.

Last Monday, a day before Greenfield's report was issued, Sanford Bernstein cable and satellite analyst Craig Moffett put out a note reminding investors that TWC was his “best of Bernstein” pick for the fourth quarter.

“Time Warner Cable offers investors strong growth in a strong and economically defensive business, and one that is rapidly gaining share versus its telco rivals,” Moffett wrote. He added that TWC has shown strong operational performance, has already funded the $10.9 billion dividend associated with its full separation from parent Time Warner Inc. later this year and that the move will create the first (and only) one-share, one-vote publicly traded cable company.