Bank of America Reiterates Buy Rating on Comcast, Time Warner Cable, and Cablevision

In a report on the cable and satellite industry, Bank of America reiterated its Buy rating on Comcast Corporation CMCSA, Time Warner Cable Inc. TWC, and Cablevision Systems Corporation CVC. “We believe that the industry is responding to current equity market valuations with an increasing focus on shareholder-friendly initiatives such as ongoing equity buybacks and increasing dividends – all within the context of maintaining capital structure discipline,” Bank of America writes. “We view the industry as attractive due to: (1) low valuations, in the 6x EBITDA and ~10% FCF yield ranges, (2) declining capital intensity, (3) improving FCF generation (4) significant capital returns through dividends and significant share repurchases and (5) opportunity to layer new, high margin revenue opportunities (e.g. SME) onto the flexible cable plant.” “As such, we believe the industry continues to be an undervalued sector with the opportunity to generate multiple expansion over the medium-term.” Comcast Corporation closed Wednesday at $23.46; Time Warner Cable closed at $73.88; and Cablevision closed at $36.02.