"Comcast reported weaker-than-expected fourth quarter results, but with underlying operations solid. The Filmed Entertainment sub-segment within the company's NBCUniversal
division missed our expectations for both revenue and OCF due to a weak home entertainment market and tough year-over-year comparison," Canaccord Genuity said.
This miss accounts for the shortfall relative to Canaccord Genuity's expectations with Cable Communications, Broadcast (OCF) and Theme Parks all outperforming, analysts said.
Exclusive Report:Jim Cramer's Best Stocks for 2015
Commentary on the conference call suggests 2015 could see "continued momentum in cable customer additions," particularly video, while NBC experiences similar trends to 2014, analysts noted.
With fundamentals strong, the Time Warner Cable (TWC) merger still on track to close early this year and management committed to repatriating cash to shareholders, Canaccord Genuity continues to recommend the stock, and increases its price target, as they roll forward their valuation to 2016 estimates.
Separately, TheStreet Ratings team rates COMCAST CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate COMCAST CORP (CMCSA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, impressive record of earnings per share growth, compelling growth in net income, revenue growth and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- COMCAST CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, COMCAST CORP increased its bottom line by earning $2.56 versus $2.29 in the prior year. This year, the market expects an improvement in earnings ($6.22 versus $2.56).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Media industry average. The net income increased by 49.6% when compared to the same quarter one year prior, rising from $1,732.00 million to $2,592.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 4.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, COMCAST CORP's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: CMCSA Ratings Report