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Why Did Macquarie Upgrade Comcast Stock?

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Comcast’s analyst upgrade

Comcast (CMCSA) stock rose 0.6% in premarket trading on April 9 after analysts at Macquarie upgraded its rating to an “outperform” from a “neutral.” Macquarie analyst Amy Yong has raised its price target to $49.

Comcast stock closed at $40.71 on April 8. The stock has risen 20.2% YTD (year-to-date) as of April 8. However, Comcast has returned 22.6% in the past year. In comparison, the stocks of Comcast’s media peers the Walt Disney Company (DIS), Netflix (NFLX), Dish Network (DISH), and CBS (CBS) have risen 4.8%, 35.0%, 36.1%, and 17.9%, respectively, YTD.

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Macquarie’s view on Comcast

Yong seems bullish on Comcast due to its efforts and its focus on its recently acquired London-based Sky along with its Xfinity and NBCUniversal platforms. Yong is optimistic about the company’s growth, which is expected to result from its launch of xFi in Italy and its Sky streaming services. The integration of NBC’s X1 voice platform into Sky Q is also expected to boost the company’s earnings growth.

Xfinity’s industry-leading apps and mobile business are also gaining popularity. NBCUniversal’s list of movies for 2019 and the launch of its streaming services in early 2020 could also provide upside to Comcast’s earnings.

Recommendations and target price

Among the 33 analysts providing recommendations on Comcast stock, 24 have given it “buys,” and nine have given it “holds.” No analysts have given it “sells.”

Analysts have given CMCSA a target price of $44.70, which implies a potential upside of 9.8% based on its closing price of $40.71 on April 8.

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