Why Is the Market Optimistic about Comcast?



Comcast’s stock price rises

On May 27, Comcast’s (CMCSA) stock price closed at $62.88. The company’s stock price has risen by 10.8% year-to-date and 2.9% in the past month. In contrast, The Walt Disney Company (DIS) has seen its stock price fall by 5.7% year-to-date. 21st Century Fox (FOXA), and Time Warner (TWX) have risen by 5.9% and 16.8%, respectively, year-to-date.


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Factors that could be impacting Comcast’s stock price 

In 1Q16, Comcast posted EPS (earnings per share) of $0.87, which exceeded the Wall Street analyst consensus estimate by 10.1%. In 1Q16, Comcast’s video business results exceeded results from the previous nine years. Video customers grew by 53,000 in fiscal 1Q16. Comcast’s HSI (high-speed Internet) services segment saw its best results in four years, with the number of HSI customers growing by 438,000 in fiscal 1Q16. The company’s NBCUniversal’s key growth drivers continued to be the broadcast television, cable network, and theme park segments.

In this series

In this series, we’ll look at how Comcast intends to benefit from its DreamWorks acquisition and why it does not expect its high-speed Internet and video businesses to slow down in the near future. We’ll also look at why Comcast values its sports programming and whether the company is likely to enter the wireless network space.

We’ll look at the financial upside to the DreamWorks acquisition for Comcast in the next part of this series. Comcast makes up 0.84% of the SPDR S&P 500 ETF (SPY). SPY invests 3.6% of its holdings in the computer sector.


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