Comcast Shares Rise After Q1 Earnings Blow Past Estimates; Target Price $65

Comcast Corporation, one of the largest cable television operators in the United States, reported better-than-expected earnings and revenue in the first quarter as an increase in broadband subscribers helped the cable giant to recover from the COVID-19 woes, sending its shares up about 4% on Thursday.

The cable television operator said its revenue for the first quarter of 2021 increased 2.2% to $27.2 billion, beating Wall Street’s consensus estimates of $26.7 billion. Adjusted net income increased 8.1% to $3.5 billion. Adjusted EBITDA increased 3.5% to $8.4 billion.

Comcast said its earnings per share (EPS) for the first quarter of 2021 was $0.71, an increase of 54.3% compared to the first quarter of 2020. Adjusted EPS increased 7.0% to $0.76, above the market expectations of $0.59 per share.

Following this, Comcast shares rose about 4% to $56.17 on Thursday.

The media giant also said its total broadband customer net additions were 461,000, total video customer net losses were 491,000 and total voice customer net losses were 106,000. In addition, cable communications added 278,000 wireless lines in the quarter.

Comcast Stock Price Forecast

Sixteen analysts who offered stock ratings for Comcast in the last three months forecast the average price in 12 months of $62.13 with a high forecast of $70.00 and a low forecast of $48.00.

The average price target represents a 10.59% increase from the last price of $56.18. Of those 16 analysts, 13 rated “Buy”, two rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $65 with a high of $77 under a bull scenario and $45 under the worst-case scenario. The firm gave an “Overweight” rating on the cable television operator’s stock.

Several other analysts have also updated their stock outlook. Comcast had its price target hoisted by stock analysts at Pivotal Research to $65 from $63. The firm currently has a “buy” rating on the cable giant’s stock. Macquarie lifted their price target to $58 from $53. Truist lifted their price target to $60 from $50. Cowen raised Comcast their price target to $60 from $56.

Analyst Comments

“In Cable, we believe continued runway in broadband will offset video declines, with the mix shift driving rising margins and falling capital intensity. At NBCU/Sky, we believe temporary headwinds from macro and COVID-19 have pressured CMCSA multiples, resulting in an attractive risk/reward,” said Benjamin Swinburne, equity analyst at Morgan Stanley.

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