Comcast (CMCSA, Financial) is set to disclose its quarterly earnings on April 24. As the date approaches, financial analysts are expressing varied opinions on the stock. Wells Fargo recently downgraded Comcast from an Equal Weight rating to Underweight, adjusting its price target downwards from $37 to $31. The downgrade reflects concerns over rising mobile costs impacting broadband growth and challenges faced by its NBCUniversal division. The firm's projections for Comcast's EBITDA in 2025 and 2026 are 4% to 5% below consensus estimates, indicating that Comcast may be losing its defensive standing in the market.
In contrast, Scotiabank painted a slightly brighter picture for Comcast, elevating its price target slightly from $44.50 to $45, while maintaining a Sector Perform rating. The firm sees the Telecom, Media, and Technology sectors as stable investments amidst current economic uncertainties, although it warns that subscriber growth could be modest due to declining immigration rates.
Meanwhile, KeyBanc also adjusted its stance by reducing Comcast's price target from $47 to $45, though it maintained an Overweight rating. The firm appreciates the defensive qualities of cable and towers but advises caution regarding Data Centers, Media, and Wireless due to potential impacts from consumer spending declines affecting areas like advertising and theme parks.
Elsewhere, Warner Bros. Discovery (WBD) and Paramount (PARA) are also facing scrutiny as they prepare to report earnings on May 8. KeyBanc lowered the target price for Warner Bros. Discovery, while UBS maintained a Sell rating on Paramount, reflecting broader concerns over the media sector's vulnerability to economic downturns, especially in advertising.
As the media landscape evolves and economic challenges persist, investors will be keenly watching how Comcast navigates upcoming hurdles and what future guidance it offers.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 25 analysts, the average target price for Comcast Corp (CMCSA, Financial) is $42.85 with a high estimate of $58.00 and a low estimate of $31.00. The average target implies an upside of 23.82% from the current price of $34.61. More detailed estimate data can be found on the Comcast Corp (CMCSA) Forecast page.
Based on the consensus recommendation from 30 brokerage firms, Comcast Corp's (CMCSA, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Comcast Corp (CMCSA, Financial) in one year is $45.94, suggesting a upside of 32.74% from the current price of $34.61. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Comcast Corp (CMCSA) Summary page.
Key Business Developments
Release Date: January 30, 2025
- Revenue: Record revenue of $124 billion for 2024.
- Adjusted EBITDA: Record adjusted EBITDA of $38 billion in 2024.
- Adjusted EPS: Increased by 9% for the year.
- Free Cash Flow: Generated $12.5 billion for the year.
- Broadband Revenue: Grew 3% for the year.
- Convergence Revenue: Grew nearly 5% for the year.
- Wireless Revenue: Grew at a mid-teens rate, with 1.2 million new lines added.
- Business Services Revenue: Grew at mid-single digit rates, approaching $10 billion in revenue.
- Peacock EBITDA Losses: Improved by $1 billion.
- Net Broadband Subscriber Additions: Negative 139,000 in the fourth quarter.
- Adjusted EPS (Q4): Increased 14% to $0.96.
- Free Cash Flow (Q4): $3.3 billion.
- Capital Returned to Shareholders: $13.5 billion for the full year.
- Net Leverage: Ended the year at 2.3x.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Comcast Corp (CMCSA, Financial) achieved record revenue of $124 billion and record adjusted EBITDA of $38 billion in 2024.
- The company reported a 9% growth in Adjusted EPS and generated substantial free cash flow of $12.5 billion.
- Wireless revenue grew at a mid-teens rate, adding 1.2 million lines, reaching 12% penetration of the broadband customer base.
- Peacock achieved a $1 billion improvement in EBITDA losses, with strong revenue growth of 46% for the full year.
- Comcast Business is nearly $10 billion in revenue, with plans to acquire Nitel to enhance capabilities in serving multisite enterprise and midmarket businesses.
Negative Points
- Net broadband subscriber additions were negative 139,000 in the fourth quarter, indicating intense competition.
- The company faces challenges from fixed wireless expansion and the end of the ACP program.
- Increased competition from fiber operators and fixed wireless is expected to continue, impacting broadband growth.
- The company anticipates significant costs leading up to the opening of Epic Universe, impacting short-term financials.
- Peacock's NBA content addition may initially increase costs, requiring strategic adjustments to absorb expenses.
