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Investing.com - Benchmark has reiterated its Buy rating and $48.00 price target on Comcast Corp (NASDAQ:CMCSA), a profitable media giant with $123.56 billion in revenue, as NBCUniversal implements significant price increases for its Peacock streaming service. According to InvestingPro analysis, the stock appears undervalued at current levels, with a healthy 3.8% dividend yield.
Starting next Wednesday, Peacock Premium Plus will increase its monthly price by $3 to $16.99, while the flagship ad-supported offering will rise from $7.99 to $10.99, representing increases of approximately 20% and 40% respectively. Current subscribers will see the new billing rates beginning August 22.
The streaming service is also introducing a new $7.99 Select tier that provides next-day NBC and Bravo program access and library content, but excludes originals, NBC Sports, and movie premieres. This follows a previous $2 price increase in July 2024 ahead of the Paris Olympics.
Benchmark estimates that even a realized 25% blended increase after adjustments for mix changes and distributor deals could generate over $800 million in annual revenues at the current 41 million subscriber level reported on March 31, 2025. The firm notes this revenue should carry "near full drop through to EBITDA."
NBCUniversal recently reported that Peacock generated a 20% increase in upfront advertising volume and now represents nearly one-third of NBCUniversal’s new season commitments, with momentum building from high-profile originals including "Poker Face" and "Love Island."
In other recent news, Comcast Corporation announced a price increase for its Peacock streaming service, with the ad-supported plan rising to $11 a month and the ad-free version increasing to $17. This move comes as Peacock faces financial challenges, reporting a $215 million loss on $1.2 billion in revenue for the first quarter. Additionally, Comcast has sold Sky Deutschland to RTL Group for an initial payment of €150 million, with potential additional payments dependent on RTL’s share price. This acquisition aligns with RTL’s shift toward subscription-based models amidst challenges in traditional advertising. On the analyst front, Benchmark maintained a Buy rating on Comcast, citing expected improvements in Xfinity performance and positive catalysts from Universal Pictures and the new Orlando Epic Universe Park. Furthermore, KeyBanc Capital Markets reiterated an Overweight rating on Comcast, projecting significant revenue and operating cash flow from the upcoming EPIC Universe theme park. The proposed "One Big Beautiful Bill" is also expected to benefit Comcast by reducing cash tax payments and enhancing free cash flow. These developments reflect Comcast’s strategic efforts to strengthen its financial position and expand its media and telecommunications offerings.
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