Merrill Lynch upgraded Cablevision (CVC ) to buy.
Analyst Jessica Reif Cohen says Cablevision owns and operates perhaps the most desirable cable assets in the U.S., but its shares are trading at an unduly deep discount to Comcast and Cox Communications.
Reif Cohen says she expects positive news on high-speed data into 2003. She projects year-end 2002 data subscriptions at 755,000, up 49% year over year, and sees one million subscriptions at year-end 2003.
Despite weakness in the cable sector, mainly on investors' concerns about Time Warner Cable's rising programming costs, Reif Cohen these concerns do not apply to Cablevision. Simply put, she says the Yes Network is Time's predicament, not Cablevision's. She recommends the purchase of Cablevision based on its strong fundamental growth and superior asset value. She sees 33% 2003 consolidated EBITDA growth.