Rosenblatt analyst Bernie McTernan said in a note to investors that the Philadelphia-based Comcast "offers a compelling risk reward as we still see room for CMCSA to continue to take broadband market share and drive cable margin expansion."
McTernan said that Comcast has grown total broadband subscribers over the past five years by about 1.5 million, benefiting from end market growth and taking share from DSL operators.
"We think the company still has substantial growth in front of them over the next five years, although at a slower pace relative to the past five years," McTernan wrote. "We think the company should take the threat of fixed wireless seriously, although we are taking a 'show me' approach as we have concerns over the quality of service and think the potential share loss should be minimal."
McTernan said the method of monetization in the industry is shifting from the multichannel liner bundle towards streaming and direct-to-consumer.
"Consumers increasingly need a high-speed connection in order to access content in this new environment," McTernan wrote, "and cable companies have been winning, and we expect will continue to win market share. Ultimately, we see the streaming benefits to broadband offsetting the negatives from a shredding multichannel bundle for Comcast."