Comcast (CMCSA) Can Use Its Cash Cow to Fund NBCU Buy-In

Nomura Securities today reiterated a Buy rating on Comcast Corp (NASDAQ: CMCSA) and raised its price target to $44.00 (from $40.00). Analyst said they continue to view its cable business as a steady cash generator, which will help it continue to fund dividends and buybacks. Long term, analysts think improvement at NBC Universal is critical, and gains are already evident, though challenges remain.

"Broadcast rating are up, but we look past The Voice to highlight weakness across the remainder of the lineup," said analyst Mike McCormack. He doesn't see significant upside in Cable affiliate fees at this time.

Comcast has been pondering a buy-in of GE's (NYSE: GE) remaing stake in NBCU. Funding for a potential buy-in would not be an issue, McMormack thinks, even if a deal is accelerated.

"If Comcast and GE were to negotiate an earlier exit, the low leverage Cable could be used to fund the full buyout. The resulting Comcast would have a manageable 1.6x net Debt/EBITDA and generate nearly 9.4bn in fully taxed FCF in 2015."

For an analyst ratings summary and ratings history on Comcast Corp (NASDAQ: CMCSA) click here. For more ratings news on Comcast Corp click here.

Shares of Comcast Corp closed at $38.92 yesterday.

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