Time Warner Looks Like A $90 Stock With Fatter Margins

Time Warner Cable's stock has come a long way since 2010 and is currently trading in the high $70s. We believe there is more to grow provided the company can maintain its growth in broadband and make some significant improvements in its pay-TV and digital phone businesses.

Although Time Warner Cable has gained subscribers in VoIP (Voice over Internet Protocol), it has not kept up with the industry growth, leading to a fall in market share.

Our price estimate for Time Warner Cable stands at about $76, implying a discount of less than 5% to the market price. But in the above scenario of better Pay-TV and VoIP margins, the stock could pass $90.

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