Comcast: Still Cheap After Good Cable Growth In Q4 Results
(Preview) Company Update (CMCSA US) (Buy)
Summary
Despite gaining 9% since our last update in November, Comcast stock still has a P/E of just 9.9x and a Dividend Yield of 3.1%.
The core cable business has continued its moderate EBITDA growth, driven by higher Average Revenue Per User and cost efficiencies.
Theme Parks and Studios are doing well, but Media profits are falling due to rising Peacock losses and pressures on linear networks.
The small Sky business has good operational growth in the U.K. but has not yet turned the corner fully in EBITDA.
With shares at $37.23, our forecasts indicate a total return of 53% (16.4% annualized) by 2025 year-end. Buy.
Introduction
We review our investment case on Comcast, three months after our last update in November 2022, based on Q4 2022 results and CFO Jason Armstrong's comments at a investor conference this week.
Comcast shares have gained 9.3% (including dividends) since our last update, but have still lost 24.5% since the end of 2020 and 9.5% since we initiated our Buy rating in January 2…