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.
“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.
Comcast Corporation, one of the largest cable television operators in the United States, reported better-than-expected revenue in the third quarter as an increase in broadband subscribers helped the cable giant to recover from the COVID-19 woes, sending its shares up about 1.5% on Thursday.
The cable television operator said its revenue for the third quarter of 2020 decreased 4.8% to $25.5 billion and net income attributable to Comcast plunged 37.2% to $2.0 billion. Adjusted net income slumped 18.2% to $3.0 billion. That was better than the market expectations of $24.74 billion.
Comcast said its earnings per share (EPS) plunged 37.1% to $0.44 in the third quarter, from the same period a year ago. Adjusted EPS fell by 17.7% to $0.65. For the nine months ended September 30, 2020, EPS was $1.55, a 27.9% decrease compared to the prior year. Adjusted EPS down 12.4% to $2.04, the company said in the statement.
At the time of writing, Comcast shares traded 1.5% higher at $42.64; however, the stock is down about 6% so far this year.
“This third quarter, we delivered the best broadband results in our company’s history. Driven by our industry-leading platform and strategic focus on broadband, aggregation and streaming, we added a record 633,000 high-speed internet customers and 556,000 total net new customer relationships,” said Brian L. Roberts, chairman and chief executive officer.
“Our integrated strategy is also driving results in streaming with nearly 22 million sign-ups for Peacock to date, and we are exceeding our expectations on all engagement metrics in only a few months. And Sky continues to add customer relationships at higher prices while reducing churn to all-time lows in our core UK business.”
Comcast Stock Price Forecast
Fourteen equity analysts forecast the average price in 12 months at $52.33 with a high forecast of $60.00 and a low forecast of $40.00. The average price target represents a 24.65% increase from the last price of $41.98. From those 14 analysts, 10 rated “Buy”, four rated “Hold” and none rated “Sell”, according to Tipranks.
Morgan Stanley gave the base target price of $57 with a high of $72 under a bull-case scenario and $37 under the worst-case scenario. The firm currently has an “overweight” rating on the cable television operator’s stock. Comcast had its price objective upped by Barclays to $48 from $46. The brokerage currently has an overweight rating on the cable giant’s stock.
Several other analysts have also recently commented on the stock. BidaskClub downgraded to a “buy” rating from a “strong-buy”. ValuEngine upgraded to a “hold” rating from a “sell” in Sept. Citigroup increased their price objective to $49 from $48 and gave the company a buy rating in Aug. Sanford C. Bernstein upgraded shares of Comcast to an “outperform rating” from a “market perform” and upped their price target for the stock to $52 from $48 in July.
“In Cable, we believe continued runway in broadband will offset video declines, with the mix shift driving rising margins and falling capital intensity,” said Benjamin Swinburne, equity analyst at Morgan Stanley.
“At NBCU/Sky, we believe temporary headwinds from macro and COVID-19 have pressured CMCSA multiples, resulting in an attractive risk/reward,” Swinburne added.
Upside and Downside Risks
Upside: 1) Cable competition is overestimated, driving more broadband volume growth versus expects. 2) Faster than expected macro recovery – highlighted by Morgan Stanley.
Downside: 1) Macro uncertainty and COVID-19-related headwinds pressure cyclical legs of the business, primarily at NBCU. 2) Greater regulatory oversight negatively impacts broadband pricing growth.
Netflix (NFLX) posted strong Q1 2020 results in April, meeting aggressive revenue guidance at $5.75 billion. The company added 15.77 million subscribers, more than double the consensus, but the streaming giant missed the $1.57 EPS estimate. Analysts may have miscalculated the impact of stay-at-home and quarantine orders, triggering the shortfall. Upside guidance for Q2 expects the the company to earn $1.81 EPS and $6.05 billion in revenues. Spokesmen haven’t discussed recent performance but Q2 2020 earnings are scheduled for July 21 release.
Wall Street Bullish Consensus
Wall Street rushed to upgrade Netflix when the pandemic hit the USA in the first quarter, realizing that subscriber growth would escalate due to shutdowns. It’s now rated a ‘Moderate Buy’ at TipRanks, based upon estimates from 35 analysts covering the stock. 24 ‘Buy’, 7 ‘Hold’, and just 4 ‘Sell’ recommendations support the bullish consensus rating, despite the lofty 84.61 price-to-earnings ratio (P/E). Updated price targets range from $198 to $580 and the stock is now trading nearly 50 points below the mid-range target of $465.
The bullish performance has generated enthusiastic analyst commentary this June, with JP Morgan analyst Doug Anmuth maintaining an overweight rating. He reiterated a $535 price target while noting that “daily average user (DAU) growth remains elevated from pre-COVID-19 levels and has been stable for about 6 weeks at 20% year-over-year, suggesting strong engagement”. He also highlighted Southeast Asian growth after successful launches in the Philippines, Thailand, Indonesia, and Malaysia.
Mixed Netflix Outlook
The technical chart has generally tracked bullish commentary so far in 2020. Netflix broke out above 2018 resistance at $423 in April but has struggled to gain ground since that time, wobbling back and forth across the breakout price. This price action denotes high levels of uncertainty, with post-outbreak normalcy favoring bears while fears about a dreaded ‘second wave’ reinforce the bullish argument.
Netflix growth could be hampered by a highly-competitive landscape after the current crisis. New services from Walt Disney (DIS), Apple (AAPL), and Comcast (CMCSA) could take market share and stretch subscriber budgets. The ‘steaming wars” became a hot topic in 2019 before the November Disney+ release but has receded during the pandemic. It’s certain to make headlines once again if Netflix’s July earnings fail to meet estimates.
Comcast Corporation (NASDAQ:CMCSA) is reportedly interested in purchasing a large portion of assets belonging to Twenty-First Century Fox Inc Class A (NASDAQ:FOXA) at a hefty price of $65 billion.
The company has announced on Wednesday that it is willing to pay as much as $65 billion in order to acquire most of the businesses owned by Fox, particularly its film and TV assets. The announcement means the company is planning to battle it out with Walt Disney Co (NYSE:DIS). Fox is owned by Rupert Murdoch and is one of the biggest media companies in the U.S.
Comcast is currently the largest provider of broadband and cable services in the U.S. and its bid for Murdoch’s company comes just one day after a merger between Time Warner Inc (NYSE:TWX) and AT&T Inc. (NYSE:T) was approved by a Federal Judge. Comcast executives had reportedly been waiting for a ruling on the merger before announcing their bid for Fox.
The move highlights the increasing competition between traditional media companies as they face pressure from Silicon Valley giants such as Amazon.com, Inc. (NASDAQ:AMZN) and Netflix, Inc. (NASDAQ:NFLX). The content streaming companies have not only been stealing audiences, they have also been poaching Hollywood talent for their original content.
Comcast’s bid outshines Disney’s bid
Disney offered a $52.4 billion bid to acquire Fox’s TV and film assets and the fact that Comcast is now offering a better deal makes it even more interesting. The company that will win the bid will be in a better position to weather the effects of cord cutting. Most people, especially the millennial generation are opting to use streaming services like Netflix rather than paying for traditional cable, thus threatening the profitability of cable companies.
The winner of the bid will also get to scale up its production through Fox since the firm will acquire the Fox movie studio which is responsible for major movie franchises such as “X-men” and “Avatar.” The sale will also include cable channels such as “National Geographic” and “FX” as well as regional sports networks owned by Fox.
The winning bid will also acquire Fox’s stake in the Hulu streaming platform which boasts of more than 20 million subscribers. Disney and Comcast also have stake in Hulu and the company with the winning bid will get control of the majority stake.
Comcast wants to acquire Fox’s stake in the streaming platform but sources familiar with the dealings have revealed that it will most likely be required to part with the stake in order to meet regulatory requirements. Fox is also planning to let go of its stake in European Broadcasting giant Sky.
An acquisition of the stake in Sky by Disney or Comcast would be strategic because it would allow the winner of the bid to expand its footprint. Mike Cavanagh the CFO of Comcast told investors On Wednesday that his company might even end up sharing the stake in Sky with Disney. Fox is planning to keep some of its properties but it plans on divesting a large share of its assets.
Macerich is included in the S&P 500. Its major activity is acquiring, selling, managing, developing, and remodeling shopping malls all over the US. As of now, Macerich owns around 53M square feet of commercial property, which includes 48 retail shopping malls.
Macerich stock falls into the Financial Retail category; over the last week, they fell by 0.55%.
Technically, the stock tried to break out the 200-day SMA and start forming an ascending trend. With $60 acting as a strong resistance, its breakout may issue a signal of such a trend really forming. Meanwhile, the support is at $57, while the first major target is 10 dollars higher, at $67.
The investment fund transactions show the market is becoming interested in the stock, and while the buys are still very low, at around 0.29%, one should bear in mind that Macerich had not been previously considered as something valuable at all, so even such a small buying volume may boost future performance.
Over the last two months, the stock declined, but for now, open-sell positions are not that high, just around 4.87%. As such, the decline did not draw too much traders’ attention; it even acted in a contrary way, making Macerich quite attractive.
Dicerna Pharmaceuticals, Inc. (DRNA)
Dicerna Pharmaceuticals was founded in 2006. A biopharmaceutical company, its major is creating drugs for curing chronic liver and cardiovascular diseases.
The company falls into Healthcare/Biotechnology sector. It showed a good rise last week, jumping up by 12.88%.
Chiefly, this is due to the company has resolved its dispute with Alnylam Pharmaceuticals. Dicerna Pharmaceuticals finally agreed on paying $2M and grant Alnylam 983,208 shares (equals to around $12M), with more $13M to be paid within the Following four years.
2017 saw Dicerna Pharmaceuticals with $114M net profit; thus, the upfront payment of $2M (less than 2% of profit) is not going to weigh that much. The agreement on staged payments during the next 4 years was also positive, as the company would suffer much more losses if the dispute had not been resolved.
The board members did not take any significant actions during the trials, i.e. neither bought nor sold any shares. In the meantime, the funds cut their share by 2.3%, but with over 84% still remaining, this is not a big deal either. Besides, the news on the dispute being resolved came only Friday, with all market action going to take place this week.
Open selling positions percentage (2.74%) shows the investors are not very much interested in selling Dicerna, while many bears locked in their profits Friday when the stocks rose as much as by 17.86%.
Technically, there is an ascending trend forming, with the price being above the 200-day SMA. As long as the price manages to break out $11 level and close above it, this trend may continue, having a chance to test $17, the analysts say.
Comcast Corporation is a global telecommunication giant, being the leading broadcasting corporation in the world in terms of revenue. This is also the second biggest pay cable TV and internet provider company. Besides, Comcast has been involved in TV shows and movies production since 2011.
Comcast falls into Service (Entertainment – Diversified) sector. It has grown just by 0.58% over the last week.
The Service sector in general performed badly last week, with just 2.1% growth, which shows the overall situation is a bit sore.
Technically, a descending trend is prevailing, with the price being below the 200-day SMA. The support is currently located at $33, that, if broken put, may push the prices further below to $30.
The board members have recently decreased their share by 4.95%, while the investment funds are very little interested in the company, with just a 0.1% buy. Still, the open short positions are quite low, too, being at 1.33%, which allows some room for the company growth. Still, this may only happen in case of the price breaks out $35, being then able to go towards $36.
Steven Madden, Ltd. (SHOO)
Steven Madden was founded back in 1990 and named after its founder, Stephen Madden, who is both a businessman and a fashion designer. The company creates and sells footwear and fashion accessories for men, women, and kids.
Steven Madden, Ltd. falls into the Consumer Goods (Textile-Apparel Footwear & Accessories) sector. Over the last week, the company stocks rose by 2.05%.
Overall, Consumer Goods sector was the weakest one last week, having fallen by 3.4%. The way Steven Madden are doing is quite optimistic compared to that, and this allows one to assume this rise is going to continue.
The investment fund longs are very low, at around 0.33%, but this is quite obvious, as their overall share has already reached 95.6%.
Technically, there is an ascending trend forming, with the price being above the 200-day SMA. Breakout of $48 may lead to the stock growing further.
Many analysts say Steven Madden may well reach $53 or even $58 per share.
Abeona Therapeutics Inc. (ABEO)
Abeona Therapeutics Inc was founded back in 1974; this biopharmaceutical company develops methods of curing rare and life-threatening genetic diseases.
The company falls into Healthcare/Biotechnology sector. Over the last week, its price per share increased by 5.82%.
Overall, Healthcare fell by 0.1% last week, which makes ABEO a pretty much attractive asset.
The percentage of open short positions is very high (37.11%), which may lead to a very sharp increase in price. Meanwhile, the company shares have already increased from $14 further on, as many traders started closing their selling transactions after the analysts missed the quarterly earnings forecast.
With such a high sell-off percentage, the investment funds have still increased their share by 1.14%, to reach 63.20%.
Technically, there is an ascending trend forming, with the price being above the 200-day SMA. The key support at $20 has already been broken out, which may allow the price go further to reach its target at $26.
The analysts say ABEO may well reach $26 or even $36 per share.
This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex