Cable: Kaufman Upgrades CVC, Downgrades CMCSA

Kaufman Bros. analyst Todd Mitchell this morning made a pair of calls on the cable sector, boosting his rating on Cablevision (CVC), while downgrading Comcast (CMCSA).

Here are the details:

• Cablevision: Mitchell goes to Buy from Hold, lifting his target price to $28, from $21; his call comes one day before the company is expected to report Q3 results. He thinks subscriber metrics should benefit from an “easy comp,” anticipating the company posts its first year-over-year increase in RGUs (revenue generating units) in a long time. His forecast: 139,000 RGU net adds, fewer losses in basic cable and higher digital net adds offsetting fewer high-speed data and voice net adds. Mitchell also says that the planned MSG spin should be a catalyst for the stock.


• Comcast: Mitchell goes to Hold from Buy, cutting his target to $17, from $18. Comcast will report Q3 results on Wednesday. He sees Q3 results in line with the consensus, although he says subscriber metrics are likely to point to slower growth. The stock, he says, looks cheap - but Mitchell advices avoiding temptation. “Uncertainty about the NBCU deal, the distraction it would place on Comcast and the potential drag on free cash flow over the long term to ultimately purchase GE’s remaining interest in NBCU are weighing on the stock and creating what looks like a value trap,” he writes.

In today’s trading:

• CVC is up 43 cents, or 1.9%, to $23.39.


• CMCSA is up 7 cents, or 0.5%, to $14.57.