We know that the landscape for internet service providers like entertainment giant Comcast (CMCSA) is not what it once was. Surging numbers of competitors and types of service from satellite to 5G internet to even fiber are shaking that landscape to its foundations. With that in mind, the idea that Comcast might ultimately get together with one of its key rivals, Charter (CHTR), is not so far out of line. The idea has some interest to investors, as Comcast shares ticked up fractionally in Thursday morning’s trading.
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The idea is mostly circulating among analysts right now. NSR analyst Vikash Harlalka brought it up during Charter’s earnings call last week. Though nothing concrete came out of it, the idea that Comcast and Charter—two of the leaders in residential and commercial internet access—might need to team up to fend off a steadily growing pool of competitors is not exactly out of line.
The idea might be a bit hard for regulators to swallow, though. Considering that Comcast is not just Comcast, but also NBCUniversal, this particular arrangement might get a bit too big for Comcast to countenance. But if Comcast were to spin off its communications operations into a separate operation for Charter to buy, then that might work. It also does not hurt that Comcast and Charter do not, at last report, have much geographic overlap. This effectively means that the unified company would have a much more nationwide footprint, and would likely not reduce the total number of options.
Phone Plan Drawing Ire
Meanwhile, Comcast’s new phone plans are drawing some ire from customers, as one declared it a path to Comcast “…squeezing users for every cent.” Comcast’s Mobile Plus and Mobile Select plans were intended to stop the flow of customers departing Comcast for other alternatives, but one wrinkle caught observers’ attention.
Normally, a plan with multiple lines includes a discount. But the new Comcast plans, at last report, do not. The same amount is charged per line, regardless of the total number of users. This is seen as a means to get more cash out of the customer base.
Is Comcast Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on CMCSA stock based on four Buys, nine Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 20.88% loss in its share price over the past year, the average CMCSA price target of $33.04 per share implies 22.65% upside potential.
