Bank of America Merrill Lynch Previews Earnings From Time Warner Cable

Bank of America Merrill Lynch is out with a research report on Time Warner Cable Inc. TWC, as it previews earnings from the company. It has a $87 price target and a Buy rating on shares. In a note to clients, Bank of America Merrill Lynch writes, "We anticipate Time Warner Cable's 2Q11 operating results to reflect little change from our previous forecast as the operating metrics should be consistent in just about every reporting segment. We project: (1) basic sub losses of approximately 110K with a Y/Y decline of about 3.5%, (2) Flat digital cable subscriber growth with a slight increase in total digital penetration to 74%, (3) HSD market share continues to dominate Telco rivals with our projection of 10 million subscribers – a 5% yearly increase of 89K subs. Total Cable revenue is forecast to increase 4.3% to $4.94 billion. EBITDA should increase 4.4% to $1.82 billion reflecting estimated flat margins of 37%, HSD ARPU is forecast to grow 5.3% to over $45." Shares of TWC gained 36 cents yesterday to close at $79.99.