Broyhill's Research Notes on Time Warner (TWX) ~ market folly

Tuesday, October 27, 2015

Broyhill's Research Notes on Time Warner (TWX)

Broyhill Asset Management about a month ago penned research notes on shares of Time Warner (TWX).  With all the talk of the content bundle coming apart, Broyhill sees downside risk around $65-70 per share, while TWX trades around $72 currently.

They take a look at the company's Turner division, Warner Brothers, HBO, and subscriber losses to outline the various risks in the investment.

They conclude that, "Putting it all together, we see $40B of value at Turner even assuming that accelerating subscriber losses result in significant earnings shortfalls and continued multiple compression. We see $20B of value at WB backed by attractive intellectual property and broader distribution driving pricing for content. At almost any reasonable multiple for HBO, we have a very difficult time justifying today’s $80B enterprise value of Time Warner even under very challenging assumptions."

Embedded below are Broyhill's research notes on Time Warner:

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