Time Warner stock undervalued -Barron's

NEW YORK, July 6 (Reuters) - The stock of media company Time Warner Inc (TWX.N: Quote, Profile, Research) has been undervalued by investors following the company's announcement in May that it would spin off its majority stake in Time Warner Cable and earn a $9 billion dividend, Barron's reported in its July 7 editions.

Time Warner shares, which closed at $14.69 on Thursday on the New York Stock Exchange, could be worth as much as $26 in year, the financial weekly said, citing a Deutsche Bank analyst.

Investors are ignoring the encouraging outlook of the company's other media and entertainment units, focusing too narrowly on its ailing AOL unit and ignoring what Time Warner could do with the huge cash injection from the dividend, the weekly said.

Subtracting about $5 per share for the cable business it will spin off, Time Warner's shares would trade near $10, making the stock undervalued against its own past values, and those of peers like Walt Disney Co (DIS.N: Quote, Profile, Research) and Viacom Inc (VIAb.N: Quote, Profile, Research) as measured by company value in relation to earnings, Barron's wrote. (Reporting by Phil Wahba; Editing by Leslie Adler)