Citi Raises Cablevision Systems PT To $44

Citi is raising its price target on Cablevision Systems CVC to $44 from $29. The price target assigns $9.50 to the Rainbow spin and Expect $1.8 billion buyback at ‘core' J.P Morgan says to expect a $1.8 billion buyback at ‘core' Cablevision. $1.25 billion comes from re-levered core. $550 million comes from ‘core' free cash flow less dividend. With lower ‘core' equity value, management can reduce shares outstanding from 305 million to 260 million by 2012. The Rainbow spin coupled with a re-levered ‘core' should allow equity to rise over 20% over next 12 months. As such, we remain buyers of the equity ahead of the Rainbow spin. Citi has a Buy rating on CVC CVC closed Monday at $36.24