Morgan Stanley Reiterates Equal-Weight Rating on Comcast Corporation on Announced NBCU Acquisition

In a report published Wednesday, Morgan Stanley reiterated its Equal-Weight rating on Comcast Corporation

. Morgan Stanley noted, “Comcast and GE announced plans to complete, ahead of schedule, the sale by GE of the remaining 49% equity in NBCU to Comcast. We think this is an attractive transaction for Comcast on several levels. First, it deploys excess balance sheet capacity in an accretive manner. Second, it acquires NBCU on a fwd EBITDA multiple ahead of NBCU realizing any of its multiple growth opportunities. While some of these opportunities depend on TV ratings growth or film successes, others such as a ramp in retransmission revenues and increases in cable network affiliate fees are both more material and more certain to be achieved over time. Our NBCU forecast assumes NBCU EBITDA grows ~40% from YE12 to YE17, the last year of the prior buy-out schedule. Finally, at 9-9.5x fwd. EBITDA (depending on ultimate NBCU results and the treatment of tax benefits), the transaction will complete in-line to a modest premium to media peers.” Comcast Corporation closed on Tuesday at $38.97.