Comcast Growth Steps Will Take ‘A Minimum Of Several Quarters’ To Generate Returns: Analyst

BofA Securities analyst Jessica Reif Ehrlich maintained a Neutral rating on Comcast Corp (NASDAQ:CMCSA) with a price forecast of $38 on Thursday.

Comcast remains focused on its six growth pillars, and Theme Parks represent an area that will generate strong near-term growth while also offering significant longer-term opportunities.

Universal plans to expand existing destinations, bring Universal to new domestic markets with new concepts, and grow its global footprint.

Also Read: Comcast Faces Analyst Concerns Over Broadband Losses Despite Revenue And Peacock Gains

Epic Universe, which officially opens on May 22, will provide a significant near-term boost to Comcast’s Theme Park segment as its five themed worlds (Celestial Park, Super Nintendo World, Dark Universe, How to Train Your Dragon-Isle of Berk and Harry Potter-Ministry of Magic) offer state-of-art the attractions and interactive experiences.

These new worlds add similar attendance capacity to Universal Studios Florida/Islands of Adventure. They also include three new hotels (~2k rooms, bringing Universal Orlando to 11k rooms—30k people in aggregate), 30 dining options, and 21 retail locations.

Comcast has two smaller park openings over the near term, including Universal Kids Resort in Frisco, TX, and Horror Unleashed in Las Vegas.

Longer-term plans include opening a 456-acre park 50 miles outside London, which would provide a destination for European and Middle Eastern visitors.

Construction will begin in 2026, with plans to open in 2031. Additionally, Universal will continue to expand in Orlando (including through land owned adjacent to Epic), and Universal Kids has ~70 acres to expand from the currently planned 25-acre park.

Epic will help Universal capture additional Orlando share and likely expand the overall market.

While “we believe” Epic will drive incremental visitation, it is less clear that Universal Orlando, through the addition of Epic alone (in its current form – Wicked World likely a future portal), will become a stand-alone full-week trip (although the addition of Epic brings them much closer) and the destination of choice in Orlando, the analyst remarked.

Notably, 80% of revenue has been for multiple park passes, although Universal only recently enabled single park tickets for Epic Universe.

More generally, bookings remain healthy for Universal Orlando with visibility to September, and inbound traffic to Orlando is up 6-7% for both domestic and international visitors.

Comcast is shifting strategy in its C&P operations to protect and potentially drive growth in its broadband business, making C&P EBITDA growth in fiscal 2025 challenging.

The company will focus more heavily on wireless, marketing, improving Wi-Fi offerings, and simplifying pricing and packaging.

Comcast is supporting its broadband business, reconnecting with consumers, and re-igniting growth. However, these steps will take “a minimum of several quarters” to generate returns.

Business services remain a steady pillar, likely to drive low-to-mid single-digit high-margin revenue growth over the near to intermediate term.

Price Action: Comcast stock is up 0.52% at $34.58 at last check on Thursday.

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