Comcast stock downgraded to Sector Weight by KeyBanc on profit concerns

Investing.com - KeyBanc downgraded Comcast Corp (NASDAQ:CMCSA) from Overweight to Sector Weight on Friday, citing concerns about increased investment needs and reduced shareholder returns. The stock, currently trading at $27.32, has fallen 24.45% year-to-date and appears significantly undervalued according to InvestingPro Fair Value estimates.

The downgrade comes despite better-than-expected broadband and mobile net additions for the telecommunications and media giant, according to KeyBanc’s analysis.

KeyBanc noted it had "under-appreciated the investment needed" to achieve Comcast’s recent subscriber growth results, with further investment required in terms of average revenue per user (ARPU) and a lack of broadband price increases expected in the first half of 2026. Despite these concerns, InvestingPro data shows Comcast maintains a 4.83% dividend yield and has maintained dividend payments for 18 consecutive years.

The firm also pointed to additional investments needed in Comcast’s media division, particularly related to NBA content rights, which are contributing to lower shareholder returns.

Looking ahead, KeyBanc expressed concern about increasing competitive intensity in the broadband market and indicated it would need to see "substantial evidence of broadband subscriber growth improvement" before taking a more positive stance on the stock.

In other recent news, Comcast reported its third-quarter 2025 earnings, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $1.12, exceeding the forecasted $1.10. Additionally, Comcast’s revenue reached $31.2 billion, outperforming the anticipated $30.7 billion. Despite these positive financial results, Comcast’s stock experienced a decline in pre-market trading. Analysts had projected a slightly lower performance, making the company’s actual results noteworthy. These developments come amid various market dynamics that investors are closely monitoring. Comcast’s ability to exceed earnings and revenue forecasts highlights its operational performance during this period.

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