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TAKEAWAY
Comcast is slated to release its Q4 and full-year 2019 results on January 23, 2020. For FY2019, Trefis estimates that the company will report:
Revenues of $108.8 billion (vs. consensus estimate of $108.7 billion), which would be 15.1% higher than 2018, primarily due to 2019 being the first full year post the acquisition of Sky in late 2018, and strong growth in Cable CommunicationsEPS of $3.06 (vs. consensus estimate of $3.09), which would be 21% higher than $2.53 reported in 2018, due to healthy revenue growth and expenses increasing at a lower rate, thus pushing net income margin higherWe believe that better-than-expected revenues could offset a marginal earnings miss for FY2019, which will likely result in Comcast's stock price rising once earnings are announced. In fact, our forecast indicates that Comcast's Valuation is $49 a share, which is roughly 6.5% above its current price of $46.
Our purpose? Shining the spotlight on key assumptions + data.
You can chime in with your own informed view right here.
The sections below lay out our hypothesis and one set of expectations
Price Estimate [(AxB)/C]xD
Total revenue [A]
Net Income Margin [B]
Shares Outstanding [C]
P/E Multiple [D]
(1) Revenues are expected to be marginally above consensus estimates
Trefis estimates Comcast's 2019 revenues to be $108.8 billion, roughly 0.1% above the consensus estimate of $108.7 billion
Trefis Estimate of Total Revenue
(1) Cable Communications $57.8 Bil (53%)
(2) NBC Universal $33.4 Bil (31%)
(3) Sky $18.5 Bil (17%)
(4) Eliminations -$0.8 Bil (-1%)
-----------------------------------------------
TOTAL $108.8 Bil
Consensus $108.7 Bil
Surprise $0.1 Bil
(2) EPS likely to narrowly miss consensus estimates
Comcast's 2019 earnings per share (EPS) expected to be $3.06 per Trefis analysis, slightly lower than the consensus estimate of $3.09 per share
EPS - 2019E
Total Revenues $108.8 Bil
- Total Expenses $94.7 Bil
-------------------------------------------------
Net Income $14.1 Bil
÷ Shares Outstanding 4.6 Bil
-------------------------------------------------
EPS $3.06
Consensus $3.09
Surprise -($0.03)
(3) Stock price estimate ~6.5% higher than the market price
Trefis' forecast for Comcast's 2019 earnings is slightly lower than consensus whereas the P/E multiple forecast is higher than market expectations, working out to a fair value of $49 for Comcast's stock as opposed to the current market price around $46
Stock Price [A x B]
EPS - 2019E [A]
Trailing P/E Multiple [B]
Related Analysis
Comcast Revenues: How Does Comcast Make Money?
Compact Valuation: Expensive Or Cheap?
Details about our forecast for Comcast's (1) Revenues, (2) EPS, and (3) P/E Multiple follow:
What about Revenues in 2020?
Notably, we expect Comcast's revenue growth rate to witness a sharp fall from 11% in 2018 and 15% in 2019 to just 4% in 2020, mainly due to a high base effect.
Our interactive dashboard analysis, Comcast Revenues: How Does Comcast Make Money?, provides an in depth view of the company's revenues along with our forecasts and a comparison of trends with peers Disney and Verizon.
What about Expenses and Earnings in 2020?
For 2020, we forecast a sharp reduction in revenue as well as expense growth rates, due to the high base effect. However, with revenue growth still expected to remain slightly more, the net income margin is likely to rise marginally to 13.3%
(3) A trailing P/E multiple of 16x looks appropriate for Comcast's stock, as opposed to the current implied P/E multiple of 14.9x
We use our full cash flow model for Comcast to arrive at a P/E multiple of 16x for a price estimate of $49
Note: P/E Multiples are based on Share Price at the end of the year, and reported (or expected) Adjusted Earnings for the full year
Comcast P/E Multiple
Disney P/E Multiple
Verizon P/E Multiple
Related Analysis
Our Complete Set Of Analyses On Comcast
1. How to save your forecasts for Comcast:
Click on the blue "Try Trefis" button in the header to create an account, then navigate back to this dashboard. Now, any changes you make to these inputs will be auto-saved as a scenario (see left panel of dashboard).
2. How to monitor your scenario vs. actual results
Once you've saved your forecast, you can "rename" your scenario by clicking on the gear icon next to the scenario (on the left panel). For more info, see this quick, 30-sec video (look at the 9 sec mark)
With your forecast saved and named, you can compare your forecasts to hundreds of other Trefis users who came up with their own forecasts. Lastly, you can share with friends and colleagues to show them how you fared and compare your forecasts to theirs.