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Why Analysts Are Upbeat about Comcast

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Aug. 31 2017, Updated 9:35 a.m. ET

Analysts’ recommendations

Comcast (CMCSA) stock closed at $40.20 on August 25, 2017. A majority of analysts continue to remain bullish on the stock. Currently, 32 analysts are covering the company, and 30 of them have rated the stock a “buy.” Two analysts have rated the stock a “hold.” There are no “sell” recommendations for the stock.

Analysts have set a target price of $46.21 for the stock and a consensus stock price estimate of $46. The stock is currently trading at a discount of 13.0% to its target stock price.

That indicates that analysts’ faith in the growth story of Comcast may be continuing. Now let’s look at Comcast’s valuation metrics.

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Comcast’s valuation metrics

On August 25, 2017, Comcast had an enterprise value of $252.4 billion. Valuation metrics consist of price-based multiples and earnings-based multiples. Comcast has a forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of 8.4x and a forward PE (price-to-earnings) multiple of 17.9x. In contrast, Comcast’s peers Twenty-First Century Fox (FOXA), The Walt Disney Company (DIS), and Time Warner (TWX) had forward EV-to-EBITDA multiples of 8.1x, 9.6x, and 10.7x, respectively.

At the end of fiscal 2Q17, Comcast had a free cash flow of $2.2 billion. It had an EV-to-trailing-one-year free cash flow for the firm of 27.7x as of August 25, 2017.

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