Nomura analyst Anthony DiClemente, who recently initiated coverage of Comcast with a “buy” rating, says he raising earnings estimates for 2016.
Interestingly, one place where DiClemente sees Comcast exceeding his and consensus estimates is the number of video customers added in the first quarter.
Wall Street had been nervously watching a decline in pay-TV customers, concerned that cord-cutting and cord-nevers will make it tough on operators and cut into distribution revenue for cable networks.
But DiClemente says that he expects Comcast to add 32,000 video subscribers in the first quarter, up from a year ago loss of 17,000. Wall Street consensus is that Comcast will add about 5,000 video subscribers.
DiClemente credits promotion of Comcast’s X1 operating system for the strong performance.
Over the longer term, DiClemente thinks that Comcast Cable’s programming expenses will moderate after 2017 under recently signed long-term deals.
For NBCUniversal, he sees tailwinds from retransmission and affiliate fee growth, a boost from the Rio Olympics and positive trends at its theme parks.
“According to our affiliate renewal calendar, we believe NBCU is likely negotiating with a significant percentage of its distribution partners in the coming years, creating a tailwind for affiliate and retrans growth from rate-card step ups. As such, we expect 5% adj. affiliate growth for NBC Cable in 1Q and 54% retrans growth at NBC in '16,” DiClemente said in a report released Thursday.
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