Wunderlich Securities Comments On Cablevision Systems Corporation

Wunderlich is adhering to its Buy rating on Cablevision CVC and $44 price target after admittedly seeing worse-than-expected basic customer losses of 35K off the Fox retransmission dispute. The target is derived using its S&P 500-linked valuation approach; the operational outlook for Cablevision is meshed in with Wunderlich's FiOS forecast for the Cablevision footprint. CVC remains very shareholder friendly with a further $500mm share repurchase authorization and a Form 10 for the Rainbow spin-off anticipated in March. The Fox fallout was worse than expected. CVC's WiFi network offers performance advantages relative to AT&T's well-known 3G network issues and even 4G, and the number of mobile Internet accesses increased 5x in 2010 to 50 mm+. Three distinct apps for the iPad allow remote DVR scheduling, an enhanced in-home remote, and in-home viewing of shows on the tablet. The intent remains to refinance the existing $1.1B RNS debt with further financing of $1.25B used to reduce CSC Holdings borrowing. This augments CVC's capital return program, with a $500mm new share purchase authorization with all but $19.5mm under the initial program already exhausted through 2.15. CVC closed Wednesday at $36.76