8 Nov

Comcast: Most Analysts Recommend a ‘Buy’ after Q3

WRITTEN BY Ambrish Shah

Comcast (CMCSA) reported its third-quarter earnings results on October 24. In the third quarter, the company reported total revenues of $26.83 billion, which implies a YoY (year-over-year) rise of 21.2%. Comcast’s Q3 revenues beat analysts’ estimate of $26.77 billion. The cable giant posted adjusted earnings per share of $0.79, which increased 21.5% YoY and beat analysts’ estimate of $0.75.

Today, CMCSA stock was up 0.7% at $44.99 at 11:08 AM ET. Yesterday, the stock rose 1.1% and closed at $44.70, with a market capitalization of $203.4 billion. The stock is trading 5.4% below its 52-week high of $47.27 and 37.1% above its 52-week low of $32.61. It has also returned 31.3% year-to-date.

Comcast uses ad targeting on TV

On November 5, Comcast announced that it launched new advertising tools to help marketers identify and target certain TV viewers. According to a FierceVideo report, the president of Comcast advertising, Marcien Jenckes, said, “By applying data to television advertising in new ways, across all screens, and making it easier to buy than ever before, we’re transforming TV advertising. We combine the targeting and measurement of digital, with the reach and impact of television – an unbeatable combination.”

In the third quarter, Comcast lost 238,000 pay-TV customers due to intense competition from over-the-top video streaming service providers.

Analysts’ recommendations and target prices

Let’s look at Comcast’s consolidated analysts’ recommendations. About 83% of analysts surveyed by Reuters tracking Comcast rated the stock as a “strong buy” or “buy.” The remaining 17% rated it as a “hold.” Analysts’ mean target price for the stock is $51.11 with a median target estimate of $51. The stock is trading at a discount of 14.1% to analysts’ median estimate.

Many analysts raised their price target for CMCSA stock after the company reported its third-quarter financial results. Guggenheim raised its price target from $52 to $57, RBC raised it from $42 to $44, Cowen raised it from $44 to $46, and J.P. Morgan raised it from $50 to $51.

Comcast’s valuation

Currently, Comcast is trading at 14.4x its 2019 estimated EPS of $3.10. The stock is also trading at 13.0x its 2020 estimated EPS of $3.45. Wall Street expects the company’s EPS to rise 21.6% in 2019 and 11.3% in 2020. They also expect the company’s earnings to rise at a CAGR of 10% over the next five years.

On November 7, Comcast stock closed 1.1% and 1.5% below its 20- and 50-day moving averages of $45.19 and $45.36, respectively. The stock closed 0.7% above its 100-day moving average of $44.37.

Comcast has a 14-day relative strength index (or RSI) score of 47, which suggests that the stock isn’t overbought or oversold. Please read Comcast Stock Slumps despite Q3 Earnings Beat to learn more.

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