Comcast: Cable Stronger Than Expected In Q2, Media Businesses Progressing (Preview)

Company Update (CMCSA US) (Buy)

Summary

• Comcast reported strong Q2 results that showed its Cable EBITDA up 14.4% year-on-year and its media businesses progressing.

• 2021 Broadband net adds are now expected to exceed 2019, and we expect Cable EBITDA to grow by high-single-digits this year.

• Theme Parks return to profitability in Q2, Media EBITDA was stable excluding Peacock, and Peacock continued to add users and content.

• Sky revenues are recovering but its costs are growing faster to facilitate expansion plans; it announced a new European JV with Viacom.

• With shares at $59.41, we expect a total return of 41% (11.0% annualized) by 2024 year-end. The Dividend Yield is 1.7%. Buy.

Introduction

We review our Comcast investment case based on Q2 2021 results released on July 29.

We initiated our Buy rating on Comcast in January 2020. Since then shares have returned 37% (including dividends), including 15% year-to-date.

Q2 2021 results support our investment case, and we continue to expect a low-teens annualized return (including an …