In a report published Wednesday, Morgan Stanley analyst Benjamin Swinburne upgraded Comcast CMCSA to Overweight, raising its price target to $63.00.
According to the report, relative to all relevant comps – cable, media, the broader market – CMCSA trades at a discount. The company also offers an attractive risk/reward in context of cable M&A. With over half its EBITDA from high growth businesses, consensus low teens EPS growth is a conservative base case.
“By investing in its product, brand, and network it has driven consistent 5-7% cable revenue and EBITDA growth and new initiatives like its next gen set-top platform and home security have yet to kick-in,” the report said. “Meanwhile, as seen in our December 12th primer Re-Transforming Network TV, we see relatively low-risk 10% EBITDA growth at NBCU through ‘17 tied to rising subscription revenues – NBC is two years behind CBS in retrans. Finally, regardless of potential strategic activity in cable this year, we think the stock can outperform peers.”
CMCSA closed Tuesday at $52.81 with shares trading up at 1.25 percent.
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