Comcast: Q3 Results & Omicron Correction Mark The Bottom

(Preview) Company Update (CMCSA US) (Buy)

Summary

• Comcast stock has lost 20% in 3 months, first due to investor concerns on Q3 Broadband net adds then as part of the Omicron correction.

• We believe the core Cable business will continue to grow structurally, and the recent deceleration was due to temporary external factors.

• NBC Universal financials are more volatile, but Theme Parks have been recovering strongly and Media's P&L is stable excluding Peacock.

• Sky's Q3 EBITDA grew more than 70% both year-on-year and from Q2. Leverage is back to target level, enabling more return of capital.

• With Comcast shares at $49.98, we expect a total return of 67% (18.8% annualized) by 2024 year-end. The Dividend Yield is 2.0%. Buy

Introduction

We review our investment case on Comcastafter shares fell below $50 for the first time since January 2021.

We initiated our Buy rating on Comcast in January 2020. Since then, shares have returned 15.5% (including dividends), but have lost 2.7% year-to-date.

Comcast shares were strong up to early September, with…