Comcast stock has been under pressure recently, trading at $38.50 per share, down 38% from its peak in September 2022. The company has faced challenges such as slowing growth in the broadband market, subscriber losses in cable TV operations, and increased competition from wireless carriers. However, the stock has seen a 30% increase from its recent low, driven by growth in the wireless phone space and strong performance in the theme park business. Comcast is also seeing some stabilization in the advertising space, with domestic advertising revenue flat over Q4.
While CMCSA stock has seen a decline of 20% over the past few years, the Trefis High Quality Portfolio has outperformed the S&P 500 consistently. With the current uncertain macroeconomic environment, there are questions about whether Comcast will continue to underperform the S&P or see a recovery. Comcast’s valuation is estimated to be around $43 per share, about 12% ahead of the current market price. The company’s stock performance during the turbulent market conditions of 2022 is compared to the 2008 recession to gauge its potential upside post-inflation shock.
The timeline of the 2022 inflation shock shows various factors that have affected the market, with inflation peaking at 9% in June 2022. In contrast, the performance of CMCSA stock and the broader market during the 2007/2008 crisis is analyzed to provide perspective on how the stock may fare in current market conditions. Comcast’s fundamentals have shown growth in revenues and earnings, with the company having a stable cash flow position despite elevated debt levels.
With the Fed indicating a hold on interest rate hikes and possible rate cuts for 2024, there is optimism about Comcast’s stock potential for gains. While the stock may not return to pre-inflation shock levels anytime soon, there is room for growth based on Comcast’s current valuation. Investors are advised to consider investing with Trefis Market Beating Portfolios for potential market outperformance.
