Raymond James Raises Comcast Price Target To Reflect Sky Synergies, Broadband Sub Growth

Comcast Corporation CMCSA is the best positioned large-cap telecom company, with predictable growth and a de-leveraging path that could beat expectations, according to Raymond James.

The Analyst

Analyst Frank Louthan maintained an Outperform rating on Comcast and raised the price target from $41 to $42.

The Thesis

Comcast’s de-levering could ramp faster if synergies from the acquisition of British broadcaster Sky are realized earlier than expected or if Sky’s margin and top line expand ahead of expectations, Louthan said in a Friday note.

Raymond James raised its 2019 revenue estimate for Comcast from $111.2 million to $112.2 million to reflect higher broadband sub growth and better Sky metrics and drivers. The firm reduced its EPS estimate from $3.04 to $2.67 on the basis of a possible impact to earnings due to additional interest expenses and deal-related D&A.

Comcast’s industry-leading execution, the potential for de-levering and further broadband growth “should drive higher valuation more in line with its peers,” the analyst said.