UPDATE: Citigroup Raises PT on Comcast Corporation on Announced NBCU Acquisition
In a report published Wednesday, Citigroup reiterated its Buy rating on Comcast Corporation (NASDAQ: CMCSA), and raised its price target from $43.00 to $45.50.
Citigroup noted, “[Last night], Comcast announced the acquisition of GE's 49% stake in NBCU for $16.7B. We believe price is consistent with 2009 GE agreement (which based the purchase price on peers' EV-EBITDA multiples). Peers currently trade at 9.5x ‘13E EBITDA. Comcast expects the acquisition to close by the end of 1Q13. We estimate the transaction will add $0.22 to 2013 FCF and $0.35 to 2014 FCF. Based on current multiple of 12.9x, we expect Comcast to trade up about $4.50 on early redemption announcement. Revenues increased 5.9% (pro forma) to $15.94B, in-line with our $15.94B estimate and 1% above Street. Total OCF up 7.3% at $5.28B, in-line with our $5.23B estimate and touch above Street OCF of $5.21B. Total FCF (ex-stimulus) of $1.83B, down 2% vs. 4Q11, but well above our $1.66B estimate.”
Comcast Corporation closed on Tuesday at $38.97.
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