uploads/2020/04/media-2636260_1920.jpg

Is Comcast Stock a Good Option for Investors?

By

Updated

On Wednesday, Comcast (NASDAQ:CMCSA) stock fell 5.7% and closed at $32.42 with a market cap of $147.6 billion. The stock price has fallen 3.4% in the trailing five-day period, while it has fallen 19.6% in the trailing 12-month period.

Currently, Comcast stock is trading 32.1% below its 52-week high of $47.74 and 2.3% above its 52-week low of $31.71. On a YTD (year-to-date) basis, the stock has fallen by 27.9% as of Wednesday.

Article continues below advertisement

Analysts’ ratings for Comcast stock

Today, Goldman Sachs analyst Brett Feldman reduced its target price on Comcast stock from $50 to $42. The analyst removed Comcast from Goldman’s Conviction List but maintained his “buy” rating on the stock. According to a report from TheFly, “Comcast faces a range of headwinds in 2020 including cord-cutting, closed theme parks, delayed film releases, a delay in the Olympics, pressures on ad revenues and currency.” The report also said, “However, many of these factors are timing-related, and earnings pressures in 2020 will reverse in 2021.”

Last week, Wells Fargo analyst Jennifer Fritzsche reduced its target price on Comcast stock from $51 to $37 with an “overweight” rating. Citi analyst Michael Rollins also cut its target price on the stock from $54 to $40 with a “buy” rating.

Among the 37 analysts that follow Comcast, 27 recommend a “buy” and ten recommend a “hold.” None of the analysts recommend a “sell.” As of Wednesday, analysts’ consensus mean target price is $48.09, which implies a 12-month return potential of 48.3%.

As of Wednesday, Charter Communications (NASDAQ:CHTR) and Dish Network (NASDAQ:DISH) have average broker target prices of $542.50 and $41.41, respectively. These figures imply returns of 27.9% and 121.4%, respectively, over the next 12 months.

Comcast’s growth projection

Comcast reported sales of $108.9 billion in 2019—a rise of 15.3% YoY (year-over-year) from sales of $94.5 billion in 2018. The company reported an adjusted EPS of $3.13 in 2019 compared to $2.55 in 2018. Wall Street analysts expected the company to report sales of $108.7 billion and earnings of $3.09 in 2019.

In 2019, Comcast added 1.4 million net high-speed Internet subscribers but lost 733,000 net video subscribers. The company’s video customers decreased by 3.3% YoY to 21.25 million at the end of December 31, 2019. The company lost video customers over the last few quarters due to intense competition from online streaming services like Netflix.

Article continues below advertisement

According to a LightReading report, “Comcast’s US broadband business is off to a fast start in the early part of the year, but 2020 will likely go down as an investment year for the company.” The report also said, “NBCU’s Peacock is on track for an initial launch to Comcast’s X1 and Flex customers in April, followed by a national launch in July. Comcast/NBCU expects to spend about $2 billion in Peacock’s first two years and to reach profitability by year five.”

Wall Street analysts expect Comcast to report sales of $27.07 billion in the first quarter. The figure would mark an increase of 0.8% YoY compared to $26.86 billion in the first quarter of 2019. Also, analysts expect the cable company to report an adjusted EPS of $0.70 in the first quarter compared to $0.76 in the first quarter of 2019. Currently, analysts expect a 2.7% and 3.3% rise in the company’s 2020 and 2021 revenues, respectively. Analysts also expect an adjusted EPS of $3.01 and $3.29 in 2020 and 2021, respectively.

Comcast’s stock returns

On Wednesday, Comcast stock was trading 5.1% below its 20-day moving average of $36.28. Meanwhile, the stock is trading 21.0% below its 50-day moving average of $41.05 and 24.3% below its 100-day moving average of $42.83. The stock’s 14-day relative strength index score of 37 implies that it’s approaching the “oversold” level.

On Wednesday, Comcast stock closed near its lower Bollinger Band level of $31.57. The value implies that the stock is “oversold.” Comcast’s 14-day MACD is -1.23, which also indicates that the stock is on a downward trading trend.

Comcast’s dividend yield was 2.84% on Wednesday. Notably, Dish Network and Charter Communications don’t pay cash equity dividends.

Comcast stock rose 1.8% at 9:41 AM ET today. Dish Network and Charter Communications shares have returned 0.9% and 0.5%, respectively.

Read Should You Buy or Sell Comcast Stock? and Why Did Comcast Sell Its Entire Stake in Snap Stock? to learn more. For more analysis, you can also read Comcast Stock Rose on Monday amid Supreme Court Ruling.

Advertisement

More From Market Realist