The news proved somewhat mixed for communications giant Comcast (CMCSA). The recent earnings report offered a picture that was not completely bad news, but new government regulatory actions aimed at Comcast may hit hard. The combination of factors left investors a bit on the optimistic side, and sent shares up over 2.5% in Thursday afternoon’s trading.
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Comcast’s earnings report managed to beat expectations, generally a good sign. Earnings per share came in at $1.25 per share adjusted, which was nicely above the $1.18 that analysts were expecting. Comcast also managed to post a win for revenue, which came in at $30.31 billion against the $29.81 billion that analysts looked for.
The figures did not go all Comcast’s way, however; Comcast lost around 226,000 broadband subscribers in the quarter, most of which were residential customers. Comcast did try to stem some of those losses with new pricing plans and other tactics, but the losses came in regardless. However, even here, Comcast came out ahead, as analysts were expecting Comcast to lose 257,000 subscribers.
The Government Gets Involved
“Americans no longer trust the national news outlets to report fully, accurately, and fairly.” That is the grim pronouncement from Federal Communications Commission (FCC) Chairman Brendan Carr, who announced an investigation into Comcast’s relationships with local NBC affiliates. This follows calls for “accountability” from President Trump and threats to revoke licenses currently issued.
Carr, as part of the investigation, sent a letter to Comcast in which he described how Comcast had “…increasingly asserted control over local stations,” which in turn “…eroded the public’s trust in news coverage.” Matters between networks and affiliates are generally kept quiet, but the FCC has been called on to step in before. With the government increasingly interested in what kind of news is being presented, and with the public increasingly distrustful, it becomes easy to wonder if Comcast will end up like Paramount (PARA) before too much longer.
Is Comcast Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CMCSA stock based on six Buys, eight Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 19.27% loss in its share price over the past year, the average CMCSA price target of $39.62 per share implies 18.87% upside potential.
