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On Thursday, Loop Capital Markets adjusted its price target for Comcast Corporation (NASDAQ:CMCSA) shares, decreasing it to $53 from the previous $54, while still holding a Buy rating on the stock.
The firm's analyst highlighted Comcast as the top media pick for 2025, despite the company's underperformance relative to the S&P 500 over the last five years, including 2024.
Comcast has faced challenges with broadband subscriber growth shifting from annual increases to declines and accelerated cord-cutting impacting media EBITDA. The stock is currently trading at a lower EBITDA multiple than its peers, close to a 10-year low. However, Loop Capital sees potential catalysts in 2025 that could drive price appreciation without significant financial revaluation. These include the absence of negative regulatory events, increased sports and media streaming, and higher broadband consumption.
By the end of the year, Comcast aims to have upgraded over 75% of its network to support multi-gig speeds and prepare for Docsis 4.0 technology. Additionally, the company plans to spin off its declining cable networks and launch Epic Universe, its largest domestic theme park, in the Spring of 2025. Despite modest revenue and EBITDA growth, Comcast is expected to have generated an estimated $12 billion in free cash flow in 2024, with projections exceeding $14 billion in 2025 following the completion of Epic Universe.
Loop Capital's revised price target reflects a more conservative estimate for broadband subscribers in 2025. Nevertheless, the firm believes that with the projected cash flow growth and strategic initiatives, the $53 target implies a potential return of over 40% for Comcast shareholders.
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