The new macroeconomic environment has brought new headwinds for Comcast Corporation’s (NASDAQ: CMCSA) model, according to Wells Fargo.
The Comcast Analyst
Jennifer Fritzsche maintained an Overweight rating on Comcast and reduced the price target from $51 to $37.
The Comcast Thesis
The headwinds for Comcast include the Olympics delay, weakening in the advertising landscape in the U.S. and Europe, the closing of theme parks and overall macroeconomic concerns, Fritzsche said in a Wednesday note. (See her track record here.)
Wells Fargo lowered its Comcast revenue and earnings estimates for 2020 from $114 billion to $109 billion and from $3.18 per share to $2.78 per share, respectively. The estimates for 2021 were also reduced from $116 billion to $114 billion and from $3.42 per share to $3.15 per share, respectively.
“We expect uncertainties to remain, given the fluid nature of the situation, when CMCSA reports in late April,” the analyst said.
Despite the uncertainties, the Overweight rating is being retained in view of Comcast’s broadband business, which is defensive and sustainable in the near term, she said.
Broadband connectivity will become even more important in the current environment, Fritzsche said.
While the media segment may continue to face challenges, the recurring revenue nature of Comacast's largest segment is a positive, according to Wells Fargo.
CMCSA Price Action
Comcast shares were up 4.44% at $35.06 at the time of publication.
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Latest Ratings for CMCSA
|Mar 2020||Wells Fargo||Maintains||Overweight|
|Mar 2020||Raymond James||Downgrades||Outperform||Market Perform|
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