Comcast coverage: Buy Rating and $47 Price Target from AInvest

Comcast Corp, a media and technology giant, has recently been given a Buy rating with a price target of $47. This positive outlook is due to the company’s promising Parks expansion and the turnaround of its Peacock streaming service. It is projected that by FY26E, Comcast could reach an EBITDA of $36.5 billion, with a 7.3x EV/EBITDA multiple applied.

The Parks division, which includes Universal Studios and Sky, is expected to see substantial growth in earnings. With the upcoming opening of Epic Universe in Orlando in May 2025, as well as the launch of Universal Kids Resorts in Las Vegas and Frisco in 2025 and 2026, the company could add $700 million in incremental EBITDA by FY26E. This expansion is anticipated to drive high-single-digit growth in the parks segment, fueled by strong consumer demand for unique experiences.

On the streaming side, Peacock, Comcast’s streaming service, has been making progress. The service has managed to cut annual losses by nearly $1 billion and has grown its subscriber base to 41 million. The recent acquisition of NBA rights starting in Q4 FY25 is expected to attract new audiences and improve customer retention. This shift signifies a significant turning point, moving Peacock from an aspirational to an achievable break-even point under Comcast’s model.

While there are challenges such as increased broadband churn and regulatory hurdles for the NBCU cable-network spin-off, which could reduce EBITDA by about $1.5 billion upon completion, there is still room for optimism. The market’s skepticism presents an opportunity for investors, with Comcast’s potential for operating leverage in the near term and a valuation that accounts for risks. This makes Comcast an intriguing prospect for investors at this crucial juncture.

In conclusion, Comcast Corp’s future looks promising with its Parks expansion and Peacock turnaround. Despite some risks in the market, the company’s current position indicates a potential opportunity for investors to consider.