Comcast Analysts Offer a Mixed Take After Earnings Report

JPMorgan and Morgan Stanley focus on the cable division's strength. UBS says spending will dent earnings.
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Major bank analysts offered mixed opinions on media/cable titan Comcast (CMCSA) - Get Report Friday, a day after the company reported fourth-quarter earnings.

JPMorgan and Morgan Stanley analysts maintained their overweight ratings on the stock, while UBS cut its rating to neutral from buy.

Comcast shares at last check traded at $44.66, down 2.2%.

The fourth-quarter earnings report included marked strength in the Philadelphia company’s Xfinity cable business as broadband showed heavy growth. 

But the NBCUniversal media business showed the strain of intense pressure in the industry.

JPM and Morgan Stanley focused on the bright side. “Comcast reported solid 4Q results, highlighted by strong broadband net adds and cable financials,” JPMorgan analyst Philip Cusick wrote in a report.

“Execution at Comcast cable remains strong, and we see a long runway for growth in connectivity, which is driving robust margin expansion and declining capital intensity.”

Cusick maintained his target price for Comcast at $51.

Morgan Stanley's Benjamin Swinburne is enthusiastic about strength in the cable division, too. While “NBC and Sky results and outlook were more mixed, at about 70% of Ebitda, cable drives the overweight thesis,” Swinburne wrote in a report. He affirmed his target at $53. 

At UBS, analyst John Hodulik says spending, including outlays for new growth projects, will weigh on earnings. 

“We see 2020 as an investment year, with increased capital expenditure, investment in Peacock/Sky and other working-capital drags causing a decline in free cash flow,” he wrote in a report, according to Bloomberg.

Hodulik has a price target of $49 for the stock.

That author of this story owns Comcast shares.

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