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On Friday, KeyBanc Capital Markets maintained a positive stance on Comcast Corporation (NASDAQ:CMCSA), reiterating an Overweight rating alongside a $45.00 price target. The firm’s analyst, Brandon Nispel, updated their financial model to include detailed projections for EPIC Universe, a new theme park under the Comcast umbrella. According to InvestingPro data, Comcast, currently valued at $128.9 billion, appears undervalued based on its Fair Value analysis, with the stock trading at an attractive P/E ratio of 8.47.
Nispel’s analysis suggested that EPIC Universe could generate substantial revenue exceeding $1.75 billion and operating cash flow (OCF) over $600 million by 2026. These projections are based on the expected performance of EPIC Universe within Comcast’s Content and Experiences segment. The forecast also assumes that Universal’s other theme parks will resume growth, leading to an increase in the Theme Park business’s revenue and OCF. These figures are projected to be 4.0% and 6.3% above the consensus for 2026, respectively. This expansion would add to Comcast’s already impressive annual revenue of $123.56 billion and EBITDA of $38.27 billion. InvestingPro subscribers can access detailed financial analysis and 8 additional ProTips about Comcast’s growth potential.
The analyst expressed confidence in the valuation of Comcast’s Theme Park business, estimating its enterprise value (EV) to be around $40 billion. Nispel noted that at the current valuation of Comcast’s shares, investors essentially receive the Theme Park business at no additional cost, along with the rest of Comcast’s media business.
Comcast’s Content and Experiences segment includes various entertainment and media properties, and the addition of EPIC Universe is anticipated to enhance this division’s financial performance. The positive outlook from KeyBanc reflects the expected contributions of the new theme park to Comcast’s overall business and the potential undervaluation of the company’s shares in the market.
The firm’s continued support for Comcast’s stock with an Overweight rating and a steady price target underscores their belief in the company’s growth prospects, driven by strategic expansions such as EPIC Universe.
In other recent news, Comcast Corporation has announced its plan to fully redeem $1.5 billion in notes due August 2025, as part of its financial management strategies. This move, communicated to The Bank of New York Mellon (NYSE:BK), aligns with the company’s efforts to manage its debt portfolio effectively. In a separate development, NBCUniversal, a subsidiary of Comcast, has submitted a bid to Major League Baseball to acquire broadcasting rights previously held by ESPN. If successful, NBC plans to air these games on Sunday nights and stream them on Peacock.
Meanwhile, Argus Research has downgraded Comcast’s stock from Buy to Hold, citing challenges in the broadband market due to competition from fixed wireless and fiber broadband providers. Despite growth in its streaming service Peacock, profitability remains a challenge. Scotiabank (TSX:BNS) has also adjusted its price target for Comcast, lowering it slightly to $44.50 but maintaining a Sector Perform rating. Analyst Jeff Fan noted Comcast’s strategic measures to address broadband subscriber loss, though he cautioned about potential impacts on revenue and profitability. These recent developments reflect Comcast’s ongoing strategic and financial adjustments.
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