Is Comcast Stock a $ 54 Buy?

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Comcast Action (NASDAQ
NDAQ
: CMCSA) has risen nearly 26% in the past six months and is currently trading at $ 54 per share. There are several factors behind this rally. The company ventured into streaming with the launch of Peacock in mid-2020, at a time when demand for streaming has increased due to home lockdown during the pandemic. Comcast’s
CMCSA
The broadband division, which accounts for 20% of its revenue, grew 10% in 2020 as the number of people suddenly working from home increased amid lockdowns. The gradual lifting of lockdowns and the successful roll-out of vaccines have led to expectations of recovery in the company’s theme parks and studios. While the recent surge in Covid business could delay this recovery, it should not be a major concern for Comcast as these two divisions together account for just over 10% of total revenue. The streaming, television, broadband and business services divisions continue to grow. With corporate ad spending also set to increase in 2021, this trend will benefit Comcast as it strengthens its advertising sales technologies – One Platform and NBCUniversal Identification. In order to improve shareholder returns, management also increased the dividend by 9% in January 2021, which boosted the stock. But will Comcast stock continue on its bullish trajectory over the next few weeks, or is a stock correction more likely?

According to the machine learning engine Trefis, which identifies trends in a company’s stock price data over the past ten years, CMCSA stock returns average close to 8% then three months (63 trading days) period after experiencing a 26% increase in the previous six month period (126 trading days). Notably, however, the stock is likely to surpass the S & P500 over the next three months, with an expected return that would be 4% higher than the S & P500.

But how would those numbers change if you are interested in holding CMCSA shares for a shorter or longer period? You can test the answer and many other combinations on the Trefis Machine learning to test the chances of CMCSA stocks rising after a drop and vice versa. You can test the chances of recovery over different time intervals of a quarter, a month, or even a single day!

MACHINE LEARNING MOTOR – try it yourself:

IF CMCSA shares have changed by -5% over five trading days, THEN Over the next 21 trading days, CMCSA shares move an average of 2%, which implies a return almost in line with that of the S & P500.

More importantly, there is a 57% chance that a positive feedback over the next 21 trading days and 51% chance positive excess return after a variation of -5% over five trading days.

Some fun scenarios, FAQs and making sense of CMCSA stock movements:

Question 1: Is the average Comcast share return higher after a decline?

Reply: Consider two situations,

Case 1: Comcast stock drops -5% or more in a week

Case 2: Comcast stock increases 5% or more in a week

Is the average Comcast share return higher in the next month after case 1 or 2?

CMCSA action fares better after case 1, with an average yield of 1.9% during the following month (21 trading days) in case 1 (where the stock has just suffered a loss of 5% compared to the previous week), against an average return of 0.6% for case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days in Case 1, and an average return of only 0.5% for Case 2, as detailed in our dashboard. which details the average return of the S&P 500 after falling or rising.

Try the Trefis machine learning engine above to see for yourself how the Comcast stock is likely to behave after a specific gain or loss over a period of time.

Question 2: Does patience pay?

Reply: If you buy and hold Comcast stock, over time there is an expectation that short-term fluctuations will cancel out and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and calculations from Trefis’ machine learning engine, patience absolutely pays for most of the stock!

Question 3: What about the average return after a rise if you wait a while?

Reply: The average return after a rise is generally lower than after a fall, as detailed in the previous question. Interestingly, however, if a stock has won in the last few days, you’d better avoid short-term bets for most stocks.

It is quite powerful to test the trend of the Comcast stock yourself by changing the entries in the charts above.

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See everything Trefis price estimates and Download Trefis data here

What is behind Trefis? Find out how it fuels a new collaboration and why Financial directors and finance teams | Product, R&D and marketing teams

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