Consensus Expectations for Comcast Stock (CMCSA) – 2013 Stock Analysis
Competition within the saturated U.S. Pay-TV environment has been steadily heating up over the years. Often, a period of weeks can significantly change the landscape, shifting the balance of power amongst competitors.
When MarketConsensus first covered Comcast Corporation (CMCSA) a few weeks ago, things were rather different, as indicated by the stock charts below (which shows the stock performance of Comcast, Direct TV and DISH Network Corporation). Comcast stock, which was the leader of the pack a few weeks ago is now visibly the laggard, while the middle tiered DISH Network (DISH) from our previous coverage is now in the lead.
Given this new paradigm, CMCSA shareholders are right to question what the future of their investment is, and whether it still rates as a hold, buy or sell.
Comcast is scheduled to release its Q2 2013 earnings report in late July 2013. Nothing much would have changed fundamentally since we covered the company's Q1 2013 results, other than general market sentiment, especially following the Fed's signal to gradually start tapering off its Quantitative Easing (QE) program later this year. So let's see what's in store for Q2.
In early May 2013, when the company reported its Q1 2013 earnings, EPS came in at $0.54. The 2nd quarter EPS is expected to increase to $0.63 per share, indicating an up-side estimate of 16.6%. Nevertheless, stock analysts expect the EPS to taper down to $0.60 per share the following quarter (Q3).
On an annual basis, analysts’ 2013 estimates call for a full year earnings of approximately $2.42 per share. That's a 25.38% improvement over 2012. For 2014, analysts are forecasting an EPS of $2.77, which (if the company meets or beats 2013 estimates) will be at least a 14.46% year/year improvement.
In Q1, the company reported quarterly revenues of $15.3B. Street consensus is that Q2 revenues will show a slight increase, of around $700M, bringing it to $16.0B, which is less than a full percentage point of quarter/quarter growth. Consensus has it that Q3 is likely shape up slightly better, with revenue coming in at $16.2B. While Q2 projections are roughly 5.26% higher on a year/year basis, Q3 revenue is poised to decline by around 1.8% year over year.
On an annual basis, analysts are expecting full year 2013 revenue to hit $64.1B, which will be a 2.4% year over year improvement from 2012. Street consensus also has CMCSA delivering full year revenue of around $68.0B in 2014, which (if the company meets or beats its 2013 revenue estimates) will be a y/y improvement of at least 6%.
Assuming that the company's management is able to meet consensus estimates for the next two quarters, as well as for the full year 2013 and 2014, CMCSA will have a lot to boast about on a fundamental basis. These accomplishments could add some optimism in the stock, and the share prices could see a bit of a bounce back.
Best of luck in your investing,