Comcast Posts Modest Broadband Improvement as Buybacks Accelerate

Investors seem relieved that broadband trends didn’t worsen during the third quarter at Comcast. We also believe the expectations baked into the firm’s share price are extremely low. We don’t expect a return to mid-single-digit growth rates of the recent past; we think investors should focus more on cash flow and capital allocation than small changes in broadband customer metrics. Comcast has generated about $3.40 per share in free cash flow over the past year, which it has returned, and then some, to shareholders through buybacks and dividends. Management indicated that at the current share price, the bar for acquisitions is high. Given our unchanged $60 fair value estimate, we agree that buying back stock aggressively is a great way to increase shareholder value.