In answer to all the speculation about how much AOL (NYSE: TWX) is worth as Time Warner gets closer to spinning the unit off, JP Morgan analyst Imran Khan estimates the company’s value is only $4.2 billion—a far cry from the $20 billion Google (NSDQ: GOOG) placed on it in 2005 when it paid $1 billion for a 5 percent stake in the company. JP Morgan’s estimate is also quite a bit less than value placed on AOL this summer, when Time Warner bought back that stake for $283 million, marking AOL’s worth at less than $5.66 billion.

In a separate analyst note, Pali Research’s Rich Greenfield views AOL’s market value to be around $4 billion as well. Considering the significant amount of traffic that AOL still commands—thanks in part to those several million dial-up customers—Greenfield says that if CEO Tim Armstrong can “paint a 2010 story that AOL EBITDA can do better than a 20% decline, there could be meaningful valuation upside – not to mention, the upside if M&A speculation surfaces.”

Khan believes that AOL accounts for $3.68 in value per TWX share, or 13 percent of the current stock price. Also, Khan’s $4 billion estimate assumes that there’s no debt on the books. He also expects the Time Warner spinoff to occur before the end of the year. As for Time Warner, Khan expects the separation of AOL to have a minimal impact on the company’s modest 3.8 percent growth rate.

As for Greenfield, he thinks Time Warner’s adjusted EBITDA without AOL will move from -4 percent this year to positive 4 percent in 2010, even with a continued rapid decline in its magazine properties.

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• SEC Watch: Time Warner Buys Back Google’s AOL Interest For $283 Million