Comcast (CMCSA) Faces Downgrade from BNP Paribas as Fiber Headwinds Grow

Comcast Corporation (NASDAQ:CMCSA) is included among the Goldman Sachs Dividend Stocks: Top 14 Stock Picks.

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On February 24, BNP Paribas analyst Sam McHugh downgraded Comcast Corporation (NASDAQ:CMCSA) to Underperform from Neutral. He also lowered the price target to $27 from $28. The analyst said Comcast looks “most exposed” to incremental fiber headwinds. He added that the firm’s fiber research has made it “more bearish” on the company’s outlook over the medium term.

A Reuters report on January 29 highlighted the pressure on Comcast’s broadband business. The company lost more broadband customers than expected in the fourth quarter. Competitors attracted users with aggressive promotions, putting strain on Comcast’s core segment. Fiber providers have stepped up their promotional efforts. At the same time, cheaper fixed-wireless internet services have entered the market. These changes have increased competition in the U.S. broadband space, which Comcast and Charter Communications had long dominated.

Comcast reported a loss of 181,000 broadband customers during the quarter. This was worse than estimates, which had projected a decline of 173,780 users, based on FactSet data. To respond, the company decided not to raise prices this year. It is also revising service packages, bundling offerings, and providing free mobile lines to attract and retain customers. Comcast expects that a meaningful portion of these free-line users will convert into paying customers in the second half of the year.

Even so, analysts do not expect meaningful customer growth until 2027. For the fourth quarter, Comcast reported total revenue of $32.31 billion. This came in close to estimates of $32.35 billion, according to LSEG data.

Comcast Corporation (NASDAQ:CMCSA) operates as a global media and technology company. It provides broadband, mobile, and video services to residential and business customers through Xfinity and Comcast Business. The company also owns NBCUniversal, which includes media, news, entertainment, and theme parks, and Sky, which serves customers in Europe. Comcast remains the largest home internet provider in the US and holds a strong position in advertising.

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