Comcast tops Communications gainers as Street praises cable results
Cindy Ord/Getty Images Entertainment
Comcast (NASDAQ:CMCSA) is the day's best gainer in the Communication Services sector, up 6% after topping expectations with its Q2 earnings and even outrunning Thursday's heavy gains at Meta Platforms, also up significantly after its own earnings beat.
Comcast rival Charter (CHTR) is also higher in sympathy, up 2.4% as investors read through positivity toward its report (Charter is set to post its results before the market open on Friday).
Comcast (CMCSA) posted "healthy" results, Evercore ISI's Vijay Jayant said in reaction, highlighting narrower-than-expected domestic broadband net losses and solid margin expansion across both its Connectivity and Platforms business and its Content and Experiences business, "driving upside" to the firm's forecasts for earnings before interest, taxes, depreciation and amortization; free cash flow; and earnings per share.
"Consolidated revenue grew 1.7% Y/Y and was 0.8% ahead of our forecast, while EBITDA was up 4.2% Y/Y and beat our estimate by 5.3% and consensus by 5.8% due to the margin strength at Media and Residential C&P," Jayant said.
Meanwhile, even with capital expenditures a "touch" heavier, free cash flow of $3.4B was 13.7% above Evercore's estimates thanks to higher operating cash. Jayant has a $45 price target.
Meanwhile, Steven Cahall at Wells Fargo noted "Connectivity & Platforms is operating well and we expect EBITDA/margin estimates to come up after a solid H1."
"NBCU is choppier, but Peacock trends are improving," he added. "CMCSA looks like it could lean more into H2 buybacks."
Meanwhile, results are "tracking ahead" for 2023, and "we think it's safe to say CMCSA's [cable broadband] business is stable with Connectivity & Platforms EBITDA growth solid at +3-4% Y/Y YTD including expanding margins," Cahall said.
Key questions ahead, he says, will rest on cable capex, wireless MVNO considerations and drivers of residential broadband average revenue per user -- and at NBCU, Peacock reaching break-even and "how to think about H2 linear ad trends and cord cutting," along with buyback expectations. He has a $46 price target.

More on Comcast


Comcast Corporation (CMCSA) Q2 2023 Earnings Call Transcript
Comcast Corporation 2023 Q2 - Results - Earnings Call Presentation
Comcast: Buy Mario's Box Office Success And Universal Theme Park's Attendance
Comcast Corporation: 44% Upside With Strong Competitive Advantages
Comcast pops as Q2 earnings powered by Mario, Peacock amid broadband weakness
Comcast Non-GAAP EPS of $1.13 beats by $0.15, revenue of $30.51B beats by $380M
Seeking Alphaâs Quant Rating on Comcast
Earnings data for Comcast
Dividend scorecard for Comcast