Comcast upgraded by Rosenblatt, Deutsche Bank after NBCUniversal spinoff plan

Investing.com -- Comcast Corp. has received upgrades from Rosenblatt Securities and Deutsche Bank on Tuesday following the company's surprise announcement that it plans to spin off NBCUniversal into a separate publicly traded company.

Rosenblatt analyst Barton Crockett upgraded the stock to Buy from Neutral with a $31 price target, noting that Comcast shares are "down ~50% over 5 years," meaning even a moderate change in media valuation could prove material.

Crockett said the spinoff "propels NBCU to a future where it could become subject to WB-style merger fervor at some point." His target is based on a sum-of-the-parts analysis assuming 4.5x 2027 EBITDA for the Connectivity & Platform segment and 11x for NBCU.

Deutsche Bank analyst Bryan Kraft also upgraded Comcast to Buy, though he lowered his price target to $32 from $34 as he shifted his valuation methodology to a sum-of-the-parts model.

Kraft said the separation would create two standalone companies, Comcast Cable & Technology and NBCUniversal, which will include Media, Theme Parks and Sky, with "greater strategic flexibility."

Kraft estimated approximately 30% upside over the next 12 months based on the value unlock, applying current EV/EBITDA multiples of 5.0x for Charter and 9.5x for Disney as comparables, while assuming no multiple expansion from those levels.

Management expects the transaction to close within 12 months, according to Deutsche Bank, pending SEC approval. Kraft flagged downside risks including delays in separating the businesses, further cable multiple compression, and increased broadband competition.

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