Comcast: A 10x P/E 'Value' Stock After Weak Q2-Q3 Results
(Preview) Company Update (CMCSA US) (Buy)
Summary
Comcast stock has fallen back to what it was five years ago, and now has a 10x P/E, a 10% Free Cash Flow Yield and a 3.1% Dividend Yield.
The core Cable business has slowed significantly, with broadband subscriber net adds falling to close to zero since Q2 2022.
However, this is largely due to macro, Cable's current earnings are not at risk and will likely still grow at low-single-digits.
In NBC Universal, good growth in Theme Parks and Studios is offsetting weakness in Media (including rising losses in Peacock).
With shares at $34.50, our forecasts indicate a total return of 68% (18.8% annualized) by 2025 year-end. Buy.
Introduction
In this article we review our investment case on Comcast.
Comcast’s share price is below what it was five years ago, having fallen 44% from its peak last September. Compared to when we initiated our Buy rating in January 2020, CMCSA stock has lost 16% (after dividends). The collapse in Comcast’s shares is an example of a “growth” stock having fallen to …