Wunderlich Securities Increases PT on Virgin Media to $37, Maintains Buy (VMED)

Wunderlich Securities increased its price target on Virgin Media VMED from $32 to $37. At the same time, it left its rating unchanged at Buy. In a research report published today, Wunderlich stressed it expects Virgin to be well positioned to expand its share among UK's high-end consumers and SMEs. In the report, Wunderlich states, "We are increasing our price target on Buy-rated Virgin Media (VMED) to $37 from $32; derived off our FTSE-linked valuation approach with a 6,000 Index assumption. Revisions in our forecast include allowance for a 3.0x net debt to OCF capital structure commencing in 2012 and an assumption that stock beta compresses to 1.10 from 1.22 presently. Virgin's concentrated institutional ownership amplifies the efficacy of a safe and sane 3.0x net debt OCF leverage envelope. We remain confident of Virgin's ability to use its advantaged network to gain share among high end U.K. consumers and the SME market even as the overall U.K. economy takes its austerity medicine ahead of global peers." In yesterday's trading, Virgin lost 0.56% of its value to close the day at $31.98.