Comcast: Cable Is Stable And Drives Group Earnings Growth; 26% Below Peak
(Preview) Company Update (CMCSA US) (Buy)
Summary
Comcast shares have fallen 26% below their peak last September, due to fears about U.S. Cable and a market-wide correction since February.
We believe the fundamentals of Comcast's businesses remain strong, with its Cable business stable against perceived new competitive threats.
The smaller NBC Universal business is more mixed, with strong Theme Parks and solid Studios, but headwinds in Media (especially Peacock).
Free Cash Flow / Share is still $4.44 in 2025 on reduced forecasts. Comcast stock is at a 14.0x P/E and a 7.2% Free Cash Flow Yield.
With shares at $45.54, we expect a total return of 71% (15.7% annualized) by 2025 year-end. The Dividend Yield is 2.4%.
Introduction
We review our investment case on Comcast Corporation.
Comcast shares are currently 26.3% below their peak in September 2021. While they have still gained 6.7% (including dividends) since we initiated our Buy rating in January 2020, they have lost 10.7% since 2020 year-end.
Investors have been bearish on U.S. Cable …