Comcast (CMCSA) stock has risen 1.17% as of 10:31 AM ET today. The stock also hit its 52-week high of $47.23. On Wednesday, Comcast closed marginally down by 0.11% at $46.40.
Why did Comcast stock rise?
Comcast stock has generated phenomenal returns YTD (year-to-date). The stock has gained 36.3% YTD. Comcast has also outperformed the broader market. The Nasdaq Composite Index has risen 10.7% YTD as of Wednesday.
The stock has also generated a return of 27.8% in the last 12 months. The company, which has a market cap of over $210 billion, has seen its stock rally more than 3.4% since its second-quarter financial results on July 25.
Comcast’s higher revenues and earnings drove its market cap growth. The company’s revenues rose from $80.4 billion in 2016 to $94.5 billion in 2018. Comcast’s EPS has risen at a compound annual growth rate of 15.8% in the last five years.
Comcast’s target price
Among the 34 analysts that cover Comcast, 29 recommend a “buy” or “strong buy.” The company’s mean target price is $49.42, which implies a 6.5% upside potential based on its closing price of $46.40 on Wednesday.
Forward PE valuation
Comcast has a forward PE ratio of 15.1x for 2019. For 2020, the ratio is 13.61x. The company’s adjusted EPS will likely rise 20.4% in 2019 and 11.1% in 2020. The stock looks cheap considering its expected earnings growth of 20.4% and its PE ratio of 15.1x for 2019. However, the stock appears expensive based on its expected earnings growth for 2020.
Comcast’s financial results
Comcast reported an adjusted EPS of $0.78 in the second quarter—a rise of 20% on a YoY (year-over-year) basis. In the same quarter last year, the company reported an adjusted EPS of $0.65. Comcast’s second-quarter adjusted EPS beat analysts’ estimate of $0.75.
Comcast reported revenues of $26.9 billion in the second quarter, which implies 23.6% YoY growth. In the second quarter of 2018, the company reported revenues of $21.7 billion. Comcast’s revenues missed analysts’ estimate of $27.1 billion in the second quarter. The company reported a consolidated adjusted EBITDA of $8.7 billion—a YoY rise of 17.5%.
Revenue and earnings expansion
Last year, Comcast’s sales rose YoY from $84.5 billion to $94.5 billion. Analysts expect its sales to increase 16.1% YoY to $109.7 billion in 2019 and 5.3% YoY to $115.6 billion in 2020.
The company’s adjusted EPS grew YoY from $2.06 to $2.55 last year. Analysts expect Comcast’s adjusted EPS to rise 20.4% YoY to $3.07 this year and 11.1% YoY to $3.41 next year. They expect the EPS to grow 10.3% compounded annually over the next five years.
Comcast stock’s technical levels
Based on the closing price on Wednesday, Comcast stock was trading 4.6% above its 20-day moving average of $44.34, 5.8% above its 50-day moving average of $43.87, and 7.5% above its 100-day moving average of $43.18.
Comcast’s 14-day RSI (relative strength index) score is 66.87, which shows that investors are buying the stock. An RSI number of greater than 70 implies that a stock is in the “overbought” zone.
On Wednesday, Comcast stock closed near its Bollinger Band upper-range level of $47.11, which suggests that it has been overbought.
To learn more about what’s driving Comcast stock, read Oppenheimer Upgrades Undervalued Comcast Stock.