PaineWebber Inc. analyst Christopher Dixon downgraded his rating of Time Warner Inc. and Tele-Communications Inc. class A to “attractive” from “buy.”

The action was done mainly on price, according to a contact at PaineWebber.

The two cable operators’ stocks ran up last week on investor hopes that cable revenue will rise significantly in coming years as the many new services, such as expanded pay-per-view access, come on-line.

Time Warner shares rose about 11% and TCI class A rose about 9% last week.

Dixon thinks the “story” that drove the stock prices is fundamentally intact but that the market has included the new revenue potential into the stocks’ prices more quickly than is justified.

The analyst thinks the new revenue streams will take longer to develop than the market expects.

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