Time Warner Cable-Comcast Marriage Failed; What's Next?

Investors are appear to be opening up to the reality that a merger of Time Warner Cable Inc (NYSE: TWC) and Comcast Corporation (NASDAQ: CMCSA) won't materialize after a long waiting period.

The question now remains: What's next?

Wunderlich: A Merger Would Have Only Provided ‘Modest' Upside

Matthew Harrigan commented in a note on Friday that he is "so positive" on the film/broadcast TV/parks component within NBCUniversal that a combination with Time Warner would only bring "modest" upside – as a result of "cookie-cutter" cost synergies.

Harrigan did note that it would be "highly desirable" for Comcast to acquire the New York City and Los Angeles Time Warner "clusters." However, the company's involvement in major M&A activity is "unlikely" until the next Presidential Administration although further resistance is also possible then.

The analyst said Comcast's "industry-leading" technology and product roadmap will be "well showcased" at next week's INTX 2015/The Internet & Television Expo in Chicago.

Shares of Comcast remain Buy rated with an unchanged $72 price target.

Shares of Time Warner remain Buy rated with a price target lowered to $180 from a previous $190.

Canaccord: Time Warner Reported ‘Solid' Q1 Results, But Does It Matter?

Gregory Miller commented in a note on Thursday that Time Warner reported "solid" first quarter results while demonstrating improving overall operations.

The analyst noted that with the proposed merger between Time Warner and Comcast "now dead," it is "imperative" that Time Warner demonstrate it remains capable of generating basic customer growth and to prove that its "solid" first quarter results is not a "one-time anomaly."

Miller said shares of Time Warner are likely to trade in anticipation of a renewed bid by Charter Communications, Inc. (NASDAQ: CHTR) to acquire the company. The analyst did speculate that "it remains highly likely" that Charter will submit a fresh bid but would have to do so at a higher price than the previous $132.50 per share offer and as such investors should purchase shares on any weakness.

Brean Capital: Time Warner Will Seek To Remain Independent

Todd Mitchell commented in a note on Friday that Time Warner is likely to prefer remaining independent rather than respond to acquisition "overtures" from Charter. The analyst added that this will possibly "manifest" itself in an attempt to acquire Cox and/or Brighthouse.

Time Warner's "pitch" to investors will focus on how management "has turned the ship around" and ultimately investor interests will be better served by the company using its balance sheet to be a consolidator and create a second MSO of the scale of Comcast, rather than be acquired by Charter.

Mitchell concluded that shares of Time Warner are being "propped up" by the prospects of a Charter takeover, but there is a "fair amount" of uncertainty over the outcome.

Shares of Time Warner remain Hold rated with no assigned price target.