Citi Sees 15% Upside In Time Warner Cable Inc (TWC)

Citi Investment Research sees around 15% upside in Time Warner Cable Inc TWC, as it has a Buy rating and a $70 price target on shares, as it met with CFO Rob Marcus. In a note sent to clients, Citi writes, "Mr. Marcus acknowledged that basic sub losses in 3Q10 were larger than they would like. However, data and voice trends were better. He suggested that the video losses were primarily induced by lower connects, not churn. And, most of the erosion in subscribers is at the low end. Moreover, the lower connect volume seems connected to the broader economy and the absence of growth – or absolute declines – in occupied housing units. To test this hypothesis – versus the cord-cutting risk - management spent time digging into markets that have heavy college enrollment (like Austin, TX and Columbus, OH). In these markets, enrollment and connect volumes were essentially flat. As for more recent trends, management continues to suggest that 4Q10 net adds are looking a bit better than 3Q10 trends." Shares of TWC lost 3 cents yesterday to close at $61.54.