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Comcast could be a COVID recovery story even as cable stocks have lagged, analyst says in upgrade

Comcast Corp. “possesses a notable COVID-recovery component with its stores, parks, and theatrical business,” which could help its stock even as defensive cable names have lagged recently, according to Raymond James analyst Frank Louthan IV. He upgraded shares of Comcast to outperform from market perform Friday while setting a $61 price target. Louthan sees room for upside from the NBCUniversal business, noting that Universal Studios Hollywood is reopening this week at limited capacity and with some restrictions. NBC has other open theme parks that were running at about 35% capacity late last year, with room to head higher. “We believe the uncertain timing of Universal Studios Hollywood reopening had been an overhang on the business,” Louthan wrote in a note to clients. Louthan also sees potential in the company’s Peacock streaming business and its mobility business. Peacock could start showing benefits from its exclusive streaming deal for “The Office” and could eventually come to reap rewards from the postponed Olympics, due to take place this summer, he argued. The mobility side of the business could show some improvements from the reopening of Xfinity stores, he continued. “Comcast appears to be giving up some gains from the renegotiation with Verizon this week, cutting prices by up to $15/month per line, implying aggressive promotions,” Louthan wrote. “That said, we believe subscriber gains drive investor interest and significantly reduce churn.” Shares of Comcast are up 1.3% in premarket trading Friday. They’ve gained 9.2% over the past three months as the S&P 500 has risen 10.7%.

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