6 Reasons Pivotal Research Raised Comcast Corp's (CMCSA) PT Raised to $70
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Pivotal Research analyst Jeffrey Wlodarczak raised the price target on Comcast Corp (NASDAQ: CMCSA) to $70.00 (from $65.00) after the company reported strong 1Q results highlighted by:
1) stronger than expected all-important net new data growth of +461K (vs. our +420K and +390K StreetAccount consensus)
2) stronger than forecast cable revenue growth of +6% (vs. our +5% and consensus +4%)
3) stronger than expected cable EBITDA growth of +12.4% vs. our/consensus +7.5% reflecting successful cost cutting efforts and the on-going effects of high margin data contributions
4) Comcast grew net new wireless lines in service ~30% y/y to +278K vs. our +260K and +226K consensus and Peacock added 9M sign-ups bringing total sign-ups to 42M despite missing key content (that should alleviate in 2H)
5) NBC EBITDA was $1.49B nicely ahead of our $1.35B and $1.28B consensus
6) free cash flow was well ahead of expectation at $5.3B (vs. our $2.1B and $2.7B consensus) although mostly related to working capital timing
The analyst reiterated the Buy rating, stating "CMCSA trades at a fairly remarkable 13.8X ’22 EPS for a high quality defensive name with pricing power (in a potential inflationary environment) as investors seem continually worried about a large M&A deal and to a much lesser extent recent talk from the Biden administration about $100B investment in broadband and driving down the cost of Internet service. Our view is that given the reasonably high likelihood Biden will need bipartisan support for his infrastructure plan the most likely scenario is expansion of existing broadband plans already in place (govt loans to help fund buildouts into lower home density areas) and expansion of programs to reduce the cost of broadband for economically challenged consumer households."
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