D.C. Memo: Comcast's 'Annus Horribilis' Triggers Wall Street Selloff
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Wall Street: Ugly. That’s what yesterday was like on Wall Street for a few cable stocks. Comcast, Cable One, and Shentel each hit 52-week lows on a day when the Dow, the S&P 500, and the NASDAQ had nice gains. The cause? Comcast reported losing 139,000 broadband subscribers, more than expected and an indication that the company had more work to combat competition from fiber overbuilders and Fixed Wireless Access services of T-Mobile and Verizon. “Comcast has underperformed the S&P 500 by 40 percentage points since the end of 2023,” MoffettNathanson Senior Managing Director Craig Moffett said in a client memo Thursday. He referred to 2024 as Comcast’s annus horribilis, a Latin phase for “terrible year” made famous by Queen Elizabeth II in 1992 speech at Guildhall. Comcast’s stock Thursday was down 11%, Cable One’s 6.1%, and Shentel’s unchanged after hitting an intraday 52-week bottom. Comcast’s stock was also likely hurt by pessimistic guidance from leadership for the balance of 2025. “Management made clear that they don’t expect improvement in 1Q25, and they didn’t promise any improvement after 1Q25. The message: the market is competitive; it is not likely to change; we are building a business around the reality that is,” said New Street Research analyst Jonathan Chaplin. Comcast is the No. 1 U.S. ISP with about 31.8 million subscribers. Trying to address the value end of the market that has been signing up for fixed wireless, Comcast charges $30 a month for NOW Internet, which is an all-in price for 100 Mbps, with no contracts, free Wi-Fi gear, and unlimited data. Moffett thinks Comcast can turn things around, fueled by its ability to generate free cash flow to be returned to shareholders in the form of buybacks and dividends. “We rate Comcast [a] Buy with a target price of $58” in 2025, Moffett said. Comcast closed yesterday at $33.25. Neither Cable One nor Shentel has announced a date for their fourth quarter calls.