Oppenheimer downgrades Comcast stock rating to Perform on growth concerns

Investing.com - Oppenheimer downgraded Comcast Corp (NASDAQ:CMCSA) stock rating from Outperform to Perform on Tuesday, removing its previous $38 price target. The downgrade comes as Comcast shares have fallen 7.86% over the past week and are trading near their 52-week low of $25.75.

The downgrade stems from Oppenheimer’s assessment that Comcast faces "a challenging five-year period ahead with multiple headwinds," according to the research note. This sentiment aligns with recent actions from 15 analysts who have revised their earnings expectations downward for the upcoming period.

Four primary factors motivated the rating change: limited EBITDA growth potential over the next five years, free cash flow dilution from the Versant spinout, downward repricing of its customer base, and increasing broadband competition. Despite these concerns, InvestingPro data shows Comcast maintains a strong 21% free cash flow yield and trades at a P/E ratio of just 4.63.

Oppenheimer highlighted near-term financial pressures, including Comcast’s NBA contract that costs $2.5 billion annually with uncertain timing to break even. The firm also noted the company’s plan to spin out part of its cable network business.

The cable network spinoff is expected to create approximately a 200 basis point negative impact on margins and reduce free cash flow by about $2 billion, effects that Oppenheimer indicated are not yet reflected in financial models.

In other recent news, Comcast has faced several analyst downgrades and adjustments in price targets following its third-quarter 2025 results. Benchmark lowered its price target for Comcast to $46, expressing concerns about broadband pricing, with expectations of a 1% year-over-year decline in the fourth quarter of 2025. Seaport Global downgraded Comcast’s stock rating to Neutral from Buy, citing issues with the broadband business despite the company’s attractive dividend yield. Goldman Sachs also downgraded Comcast from Buy to Neutral, reducing its price target to $30 due to challenges in the broadband sector and increased operational expenses. TD Cowen adjusted its price target to $40 while maintaining a Buy rating, noting that Comcast’s results were "good enough" with better-than-expected free cash flow. KeyBanc downgraded the stock to Sector Weight, pointing to increased investment needs and concerns over reduced shareholder returns, despite better-than-expected broadband and mobile net additions. These developments highlight the challenges Comcast faces in its broadband segment and the varied analyst perspectives on its financial outlook.

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