Goldman Sachs released a report putting a buy rating on Comcast Corp. stock, setting the company’s target price to $31 in the next 12 months. (It’s currently trading between $23 and $24.)
The report cites two major factors for the decision: Comcast’s strength as a cable provider and, perhaps surprisingly, the growth potential of NBC Universal, in which Comcast has a 50% ownership stake.
Here are a few of the major points:
- Comcast is losing subscribers at a slower rate than its competitors.
- The growth of its broadband division is staying steady.
- Comcast should be the only cable provider to increase net broadband adds in 2Q.
- NBCU’s top-line cable business great 13% year-over-year.
- “We view the recent pressure in CMCSA shares as an overreaction that too heavily discounts what we believe is an attractive NBCU asset.”
- NBC ratings are hurting, but weak periods in the past have led to large gains. (Think “Cheers” and “Friends”)
- “Though ratings improvement will necessitate significant primetime overhauls, including the 10 pm slot, we note recent introductions, most notably ‘The Voice,’ have been successful and could drive improvements in the 2011-2012 season.”
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