UBS Analyst Cites Four Reasons to Buy Comcast Shares

But Hodulik also becomes latest to predict a delayed NBC Uni deal close in Q1

NEW YORK - Comcast shares may have been under pressure this year amid concerns about possible conditions for the cable giant's planned acquisition of NBC Universal, but UBS analyst John Hodulik on Wednesday said there are enough reasons for investors to buy the stock.

In reiterating his "buy" rating and $24 price target on the stock, he cited four reasons, but also became the latest to suggest the NBC Uni deal may pass regulatory muster only early in 2011. Comcast has maintained it expects approvals and a closing of the deal by year's end.

"While closing of the NBCU deal is likely to slip from year-end into the first quarter 2011, we believe the company will likely boost its dividend and/or implement a new buyback plan following the transaction," Hodulik summarized one reason for his bullish stance.

Similarly, regulatory uncertainty surrounding net neutrality and related issues "is likely to clear up after the mid-term elections," the analyst suggested.

As a third factor, Hodulik argued that concerns over consumers giving up cable subscriptions, a phenomenon known as "cord cutting," are "overblown, with the majority of cuts due to economic factors and overall impact on the [cable operators'] cash flows less than investors fear."

Finally, Hodulik also cited Comcast's current market valuation as "attractive" compared to other cable stocks. 

In a separate report on Wednesday, Hodulik suggested that Comcast could also see a slight benefit from possible changes to the rules for retransmission consent fee disputes, as proposed by Senator John Kerry. Such a change would be a win for distribution companies over content firms, and it would "likely even the playing field for Comcast, which may have to agree to arbitration as a condition of the NBC Universal deal," he wrote.