Stronger Subscriber Numbers Earn Comcast A Price Target Increase From Argus

Argus increased the price target on Comcast Corporation

shares from $72 to $81 citing strong subscriber metrics. The brokerage maintained its rating of Buy on the stock. Analyst Joseph Bonner believes that the cable firm has strong prospects from Rio Olympics despite mixed second quarter results. The analyst expects a strong television upfront advertising market apart from enhanced subscriber net additions in the second half of the current year. The brokerage believes that concerns about cord-cutting was overblown citing its recent subscriber numbers. Argus pointed out that Comcast Cable's loss of video subscribers was only 4,000 in the second quarter compared to 69,000 in the previous year second quarter and 144,000 in the second quarter of the year 2014. As a result, the company enjoyed three straight quarters of improvement in video subscribers. This could have the potential of suggesting an inflection point. Bonner said, "The stronger subscriber numbers suggest that the company is benefiting from its multifaceted efforts to improve the customer experience through higher broadband speeds, the rollout of its X1 program-guide, and better customer service." Argus liked the company's shareholder returns program including CAGR of 20.5 percent in respect of dividend in the last five-year period apart from the share buyback program. The management clarified that DreamWorks acquisition would not change its share buyback program. The brokerage pointed out that Comcast's ROIC was 9.5 percent, which was considerably higher than the 6.0 percent average enjoyed by its peer. At time of writing, shares of Comcast traded down by $0.32, or 0.47 percent, to $67.07 on Monday.