Time Warner: Even with no Google (GOOG) guys, no Rupert; price implies negative 2014-18 ad growth; maintain Buy
TWX shares rose 2.3% yesterday off reports that Rupert Murdoch could be interested in acquiring co through Twenty-First Century Fox (FOXA), with GOOG presented as a bookend possible acquirer. The current possibility presents itself off Fox possibly getting near $14 bln in proceeds from BSkyB (BSYBY) (for its European assets. However, thesupposed interest does highlight TWX's continued undervaluation, as WSI estimates that the current stock price implies negative 2.5% annual ad growth through 2018 assuming other forecast building blocks, including near double-digit affiliate fee growth, are satisfied.