UPDATE: Morgan Stanley Downgrades Cablevision Systems To Underweight; Lowers PT To $36

Morgan Stanley is moving to a relative Underweight on Cablevision Systems CVC and reducing the PT to $36 as valuation appears full and 4Q results leaves it concerned over '11 growth. Morgan Stanley continues to like CVC's buybacks and equity shrink, the planned spin of Rainbow, which continues CVC's shareholder-friendly initiative of divesting non-core assets, and CVC's higher debt leverage. Morgan Stanley believes these positives are fully reflected in CVC's premium multiple even after applying a healthy 9.5x fwd EBITDA multiple on AMC. Upside risk could come from lower capex, as the company migrates to a network-based DVR. Downside risk includes slower growth from product maturity, M&A. According to Morgan Stanley it is unclear how much of CVC's lower than expected 4Q results can be attributed to the Fox dispute. While it is trimming its sub estimates, Morgan Stanley is giving the company the benefit of the doubt on ARPU trends. As a result, Morgan Stanley assumes cable revenue and EBITDA growth accelerate in '11 from 4Q10 levels. CVC closed Tuesday at $34.87