Oppenheimer downgrades Comcast on worse broadband subscriber declines

As previously reported, Oppenheimer analyst Timothy Horan downgraded Comcast (CMCSK) (CMCSA) to Perform from Outperform and removed the firm’s $38 price target Oppenheimer thinks it has a challenging five-year period ahead with multiple headwinds. The firm’s downgrade is motivated by four primary factors, namely limited EBITDA growth potential over the next 5-years; free cash flow dilution from Versant spinout; repricing its base down; and ramping broadband competition. Oppenheimer believes it will be difficult to grow EBITDA, free cash flow, and ARPUs over the next 5 years. Near term, it will see a major upfront impact to Media from its NBA contract kicking it, costing $2.5B/year with timing to breakeven uncertain.