We are maintaining our Neutral recommendation on
) on the back of its strong momentum in the third quarter of
2012, supported by healthy businesses generated during the London
Olympics. While the company's Cable businesses continue to beat
market expectations, NBC Universal division makes a
Importantly, the company's struggling basic video operation
continues its positive momentum. Meanwhile, Comcast has completed
its major technical innovations, such as DOCSIS 3.0, all digital
networks, and a multi-platform content delivery network.
Several newly launched services, such as Xfinity Home, Wi-Fi,
and X1 will act as long-term growth catalysts for the company.
Comcast is generating huge free cash flow and paying regular
dividends. On the flip side, the stock price has soared nearly
75% in the last year, which may restrict any above market gain.
Comcast, currently commands a short-term Zacks #3 Rank (Hold) on
Though Comcast is losing basic video subscribers, it has
performed well while reducing its churn rate despite facing a
sluggish U.S. economy. In the third quarter of 2012, Comcast lost
117,000 video subscribers compared with a net loss of 165,000
video subscribers in the prior-year quarter. Furthermore, in the
previous quarter, the company gained a net 287,000 high-speed
Internet subscribers and 123,000 telephony customers.
The recently concluded London Olympics was a huge success for
Comcast. The TV ratings of NBC Universal sports channels have
increased by 30% during the Olympics. NBC Universal generated a
massive $1.25 billion in advertising revenue in the London
Olympics. Further, the company has won the U.S. telecast right
for the 2014 and 2018 winter Olympic Games and the 2016 and 2020
summer Olympic Games.
Alongside, NBC Universal outbid its closest rivals ABC and
ESPN networks controlled by
Walt Disney Co.
) and Fox Network controlled by
). NBC Universal will pay a total consideration of $4.38 billion
for these four Olympic Games.
COMCAST CORP A (CMCSA): Free Stock Analysis
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