Analyst Jessica Reif Ehrlich of Bank of America Securities reiterated a Hold rating on Comcast, reducing the price target to $31.00.
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Jessica Reif Ehrlich’s rating is based on a combination of factors impacting Comcast’s financial performance. Despite Comcast’s better-than-expected third-quarter results, the company faces challenges due to increased investments and changes in pricing and packaging, which have pressured broadband ARPU and led to a deeper than expected decline in C&P EBITDA. Management has indicated that this investment phase will continue, with further declines anticipated over the next several quarters, prompting a reduction in ARPU estimates for the upcoming quarters.
Additionally, while Comcast is strategically positioned for potential acquisitions, such as Warner Bros., which could enhance its streaming and studio assets, the regulatory environment poses significant challenges. The company’s balance sheet and integration experience are favorable for such transactions, but regulatory hurdles remain a concern. These factors, combined with adjustments in revenue and EBITDA forecasts, have led to a Hold rating, with a reduced price objective of $31, reflecting a cautious outlook on the company’s near-term financial trajectory.
Reif Ehrlich covers the Communication Services sector, focusing on stocks such as Comcast, Fox, and Sirius XM Holdings. According to TipRanks, Reif Ehrlich has an average return of 9.8% and a 52.66% success rate on recommended stocks.
In another report released today, Barclays also maintained a Hold rating on the stock with a $34.00 price target.