Opinions
Cameron Hurst
Comcast Corp
CMCSA-Q
DON'T BUY
Oct 10, 2017
Stock price when the opinion was issued
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Gets no respect, as it's seen as cable/TV, a dying business. Has 6 growth businesses: broadband for residential and business, wireless, theme parks, streaming, and studios. Together, those are growing about 10% a year, and will be 75% of the business over the next few years. Anemic 11x, growth of 10%. Defensive, still room to go. Yield is 2.46%.
(Analysts’ price target is $50.31)
Premium contentCMCSA released some worrisome news that they expect to continue to lose customers to growing competition. However, they are managing a strategy to off load some of its services and has also announced a partnership with Warner Bros that could open some new revenue streams. We like that cash reserves are growing as debt is retired and shares bought back. It trades at 12x earnings, under 2x book and supports a 17% ROE. We recommend setting a stop-loss at $35, looking to achieve $48 -- upside potential of 20%. Yield 3.1%
(Analysts’ price target is $48.14)Premium content
Disney (DIS-N) or Comcast (CMCSA-Q)? Both fall into the media space, which is particularly challenged right now. The sector is fighting headwinds. He is more positive on Disney, but it has been struggling. With cord cutting, re-bundling, etc. you are fighting the tide, so he would prefer this. However, in the space as a whole, he would prefer not to fight the headwinds.