Why Comcast Makes A Good Growth Stock

Comcast Corporation CMCSA announced at its investor meeting that it intends to launch an integrated wireless service in mid-2017.

Argus’ Joseph Bonner maintained a Buy rating on the company, with a price target of $81.

Wireless Service

“Comcast’s having its own wireless offering accords with the long-term secular trend of entertainment/content moving to an anytime/anywhere modality which essentially means mobile wireless delivery,” Bonner mentioned.

The analyst believes investor concerns regarding the strength of the “cord-cutter/cord-never” phenomenon has been overblown, given the company’s recent subscriber numbers.

Subscriber Adds

“We are encouraged by Comcast’s continued success in boosting net subscriber additions — or perhaps we should say in ameliorating subscriber losses,” Bonner stated.

The analyst pointed out that the strength in the subscriber metrics indicate Comcast is benefitting from its efforts to improve customer experience through better broadband speeds, the rollout of the X1 program guide and improved customer service.

M&A

In addition, Comcast has made its second largest purchase in the content segment, following the NBC/Universal acquisition, with the DreamWorks Animation LLC DWA deal.

“NBC/U also has theme parks, and DreamWorks could strengthen its Consumer Products division through the cross-pollenization of hit theatrical and television content,” Bonner noted, while adding, “Although Comcast appears to be paying a rich premium, DreamWorks does have strong intellectual property and an interesting new media business in Awesomeness TV.”

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