Comcast rises as BofA upgrades on 'strong' Q1, media turnaround
Cindy Ord
Comcast (NASDAQ:CMCSA) shares rose more than 2% Monday as investment firm Bank of America upgraded the media and cable giant after it reported "strong" first-quarter results.
Analyst Jessica Reif Ehrlich raised her rating on Comcast (CMCSA) to buy from neutral and booster her per-share price target to $49, noting that "significantly higher than projected' results from the company's content and experiences segment helped pace the way, suggesting that a turnaround is in order.
Ehrlich said that she believes Comcast's (CMCSA) first-quarter results "reflect an inflection point as we believe [the company's] media operations are poised for a strong turnaround. Ehrlich also said there is evidence that its connectivity business is benefitting from low customer churn, strong average-revenue-per-user increases and solid business services growth.
Ehrlich also noted that the Comcast's (CMCSA) film division is "on fire," led by "exceptionally strong" results in animation, as evidenced by last year's Puss in Boots: The Last Wish and its joint deal with Nintendo (OTCPK:NTDOY) for The Super Mario Bros. movie, which recently topped $1B at the box office.
Additionally, Ehrlich said that the Peacock streaming service should also benefit from the strong film division and the company's theme parks unit is likely to be supported by that, while the advertising market has shown signs of stabilization and "upside potential" in the second-half of the year.
Analysts are largely bullish on Comcast (CMCSA). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates CMCSA a HOLD.
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