Cranking Up the Comcast Cash Machine: Connectivity EBITDA Margin and Financial Boost Drive Analyst Price Target Hike

  • Citigroup analyst Michael Rollins maintains Comcast Corp CMCSA with a Buy and raises the price target from $45 to $47.
  • The analyst updated his Comcast model for 1Q23 results
  • First quarter results reaffirmed the opportunity for Comcast to improve broadband revenue and its overall connectivity EBITDA margin from the mix shift to higher-margin services, even while the broadband volume remains in an ex-growth position. 
  • NBCUniversal results were broadly better than expected and saw a better full-year financial performance from its Content & Experiences segment. 
  • The analyst remains a Buyer of CMCSA shares on the opportunity to improve financial performance and retain financial flexibility to enhance shareholder value over the next 12 months. 
  • Benchmark analyst Matthew Harrigan maintains Comcast with a Buy and raises the price target from $46 to $49.
  • The re-rating reflects last week’s earnings results and high confidence in Universal’s creative pipeline following its CinemaCon presentation. 
  • Universal Pictures is readily neglected, given its moderate contribution to overall earnings. Still, a hot studio run benefits the Parks business and Media as the first window Universal film releases are on Peacock. 
  • He believes Universal is outperforming the other first-tier studios in creating new franchises even as established hit live-action and high-margin animation franchises provide a more predictable profitability backbone.
  • Universal’s CinemaCon presentation to exhibitors showed momentum likely to extend beyond The Super Mario Bros Movie and this summer’s Fast X with a highly diverse slate of movies.
  • Comcast’s breadth implies NBCUniversal is ready to weather any WGA (Writers Guild of America) and AMPTP (Alliance of Motion Pictures and Television Producers) strike(s).
  • Price Action: CMCSA shares traded lower by 1.61% at $40.97 on the last check Tuesday.
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