Analysts Laud Comcast Deal to Acquire Full Control of NBCUniversal

Analysts Tuesday night came out praising Comcast's surprise news of a $16.7 billion agreement to acquire the remaining 49 percent of NBCUniversal.  Many raised their stock target prices for the cable giant, saying the deal comes at an attractive price tag and will boost its earnings.

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Comcast's stock rose in after-hours after closing at $38.97. It gained about 8 percent after Tuesday's market close to $42 before pulling back a bit. That sets up the stock to likely exceed on Wednesday its 52-week high of $40.28 that it set last month.

ISI Media analyst Vijay Jayant increased his price target for Comcast to $47, citing the planned "accretive NBCUniversal buy-In." He maintained his "buy" rating on the stock.

"Based on our updated model, we are raising our price target to $47, up from $43 previously," Jayant said.

"NBCU Steals The Show," Evercore Partners analyst Bryan Kraft entitled his report that affirmed his "overweight" rating on Comcast shares and emphasized a $44 price target. He argued that "Comcast did not [agree to] pay a premium to buy GE's NBCU stake" in a deal that gives the entertainment company an enterprise value of $39 billion.

Said Kraft: "We estimate this values NBCU ... in the middle of the ... range of its entertainment company peers." He also estimated that Comcast's earnings per share will be boosted by 20 cents this year and 27 cents in 2014 thanks to the deal. And that alone could translate into $3.20 in stock upside, he said.

Higher expected capital spending at the NBCUniversal theme parks would only partially offset that, he added.

Meanwhile, UBS analyst John Hodulik raised his price target on Comcast's stock from $43 to $48 after the news of the planned move to take full ownership of NBCUniversal. "Accretive Transaction Should Drive Stock," the title of his report said.

"We estimate full ownership of NBCU will more than offset higher interest expense and taxes, resulting in at least 10 percent accretion to earnings per share," he said.

Email: Georg.Szalai@thr.com
Twitter: @georgszalai