Join        Login             Stock Quote

Comcast (CMCSA) Upgraded To 'Outperform' By RBC Capital, PT Lifted To $46

 February 14, 2013 12:13 PM

(By Balaseshan) RBC Capital Markets analyst Jonathan Atkin upgraded rating of Comcast Corp. (NASDAQ: CMCSA) to "Outperform" from "Sector Perform" and raised price target to $46 from $39.

Atkin is upgrading the stock based on solid cable operating trends versus mixed developments at peers; his favorable view of the accelerated acquisition of NBCUniversal, which contributes to faster revenue and operating cash flow growth characteristics for CMCSA versus peers and should drive EPS accretion; and continued prospects for favorable shareholder remuneration.

Comcast's consolidated revenues of $15.9 billion were in line, with cable/NBCUniversal revenues of $10.1 billion/$6.0 billion. Adjusted EBITDA of $5.3 billion was in line with expectations; cable EBITDA increased 6.7% while NBCUniversal grew 11.4% year-over-year, the analyst noted.

[Related -Procera Networks Inc (NASDAQ:PKT): Why 2014 Will Be Better For Procera?]

Business service revenues increased 34.2% year-over-year to $2.4 billion, accounting for 23.7% of cable revenues, Atkin noted. CMCSA continues to gain traction with mid-sized businesses. PSU adds of 503,000 bettered RBC/consensus 435,000/458,000 with HSI adds of 341,000 (RBC/consensus: 309,000/329,000). Video losses of 7,000 were in line.

Comcast's management announced the purchase of the remaining 49% of NBCUniversal for $16.7 billion. CMCSA will also purchase NBCUniversal's 30 Rockefeller Center and Englewood Cliffs facilities for $1.4 billion, the analyst noted.

[Related -Harmonic Inc (HLIT): Profit From The Rise Of Mobile Video With This Stock]

Of the $18.1 billion in cash consideration, $11.4 billion will come from cash on hand, $2.0 billion from additional borrowings from credit facilities, $4.0 billion from senior unsecured notes issued to General Electric Co. (NYSE:GE) and $732.5 million from preferred stock, Atkin noted.

The analyst estimates pro forma net leverage ratio at 2.2 times; management's medium-term leverage target is 1.5-2.0 times. He calculates $0.17 of EPS accretion.

Comcast's management announced 20% dividend increase to $0.78/share and plans to repurchase $2.0 billion of common stock in 2013, less than prior-year totals, but Atkin feels the NBCUniversal purchase is an understandable tradeoff.

CMCSA is trading up 0.91% at $40.50 on Thursday.



Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageAutomating Ourselves To Unemployment

In this current era of central planning, malincentives abound. We raced to frack as fast we could for the read on...

article imageFed: Waiting For June… Or Godot?

The Federal Reserve left interest rates unchanged yesterday, as widely expected. But the possibility of a read on...

article imageThe Single Best Place To Invest Your Money For Retirement

It was never supposed to be this daunting. At least that's what we were read on...

article imageNegative Blowback From Negative Interest Rates

The Federal Reserve is widely expected to leave interest rates unchanged today. But perhaps standing pat read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.