Comcast Beats Estimates On Robust Internet Customer Growth

Strong internet customer growth led Comcast (CMCSA) to top Street estimates. On July 30, the media company reported 2Q earnings of $0.69 per share, beating analysts’ estimates of $0.55. Revenues of $23.7 billion also came ahead of the consensus estimates of $23.6 billion in 2Q.

Though Comcast continued to witness video customer net losses of 477,000, it reported better-than-expected internet customer additions of 323,000 in the quarter. Comcast’s new ad-supported streaming service, Peacock, recorded 10 million subscribers since April.

Comcast’s CEO Brian L. Roberts commented “The solid results that we delivered in the quarter highlight the resilience of our company. Cable delivered record second-quarter customer relationship net adds, driven by the best second-quarter high-speed internet net adds in 13 years.”

Following the earnings, Credit Suisse analyst Douglas Mitchelson raised the price target to $50 (14.5% upside potential) from $48. Pivotal Research analyst Jeffrey Wlodarczak also lifted the price target to $52 (19.1% upside potential) from $48.

Wlodarczak, in a research note, said that “Comcast is weathering the Covid-19 induced economic storm better than expected with the core growth engine cable chugging along nicely and NBC is set-up for a healthy results rebound in ’21. Our view against this backdrop that Comcast shares remain simply too cheap at 13X ’21 adjusted earnings.”

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 11 Buys and 5 Holds. The average price target of $47.62 implies an upside potential of 9.1%. (See CMCSA stock analysis on TipRanks).

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