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Investing.com - Bernstein has reiterated its Market Perform rating and $37.00 price target on Comcast Corp (NASDAQ:CMCSA) ahead of the company’s second-quarter earnings report. The media giant, currently trading near its 52-week low with a market capitalization of $125 billion, appears undervalued according to InvestingPro’s Fair Value analysis.
The telecommunications giant took "collateral damage" on Friday following Charter Communications (NASDAQ:CHTR)’ Q2 earnings, according to Bernstein’s research note, as Comcast faces similar structural challenges in its broadband business.
Bernstein highlighted that broadband still generates the bulk of Comcast’s EBITDA and will account for an even larger share following the planned Versant spin-off, making its performance particularly significant despite the company’s diversification into areas like Peacock streaming and Theme Parks.
The research firm warned that Q2 is "likely to be Comcast’s worst net adds quarter in its history," noting that consensus expectations have deteriorated and may continue to drift lower ahead of the earnings announcement.
Comcast is the last among its peers to report second-quarter results, with Bernstein cautioning that "whether Comcast meets or beats, it’s not pretty either way."
In other recent news, Comcast Corporation has announced the expected members of the first Board of Directors for its planned media spin-off, VERSANT Media Group, Inc. David Novak, a current Comcast board member and former CEO of Yum! Brands (NYSE:YUM), will serve as Chairman, while Mark Lazarus, previously Chairman of NBCUniversal Media Group, has been appointed as VERSANT’s Chief Executive Officer. In another development, Comcast is increasing the price of its Peacock streaming service by $3 a month for new customers starting July 23. This change represents a nearly 38% increase for the lowest-priced plan, with the ad-supported plan now costing $11 a month and the ad-free version rising to $17. 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 over the next five years.
Benchmark has reiterated its Buy rating and $48.00 price target on Comcast stock amid these changes, specifically citing the price hikes for the Peacock streaming service. The firm also maintained its Buy rating due to expected improvements in Xfinity performance, which are anticipated to reduce the stock’s "chronic sum-of-the-parts discount." Benchmark noted that upcoming brand perception and packaging repositioning for Xfinity could serve as positive catalysts. These recent developments reflect Comcast’s strategic moves in both its media and telecommunications segments.
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