In a sign that the linear television market truly is on its last legs, cable and internet provider Comcast (CMCSA) is looking to sell off its cable network business. The news proved welcome to investors, who sent Comcast shares up over 3% in Thursday afternoon’s trading.
During its third-quarter earnings call, Comcast revealed—via President Mike Cavanagh, a CNBC report noted—that it was looking to make a spinoff company that contained its cable networks. Cavanagh noted that the new company would be “well-capitalized” and “owned by our shareholders,” which would contain its “strong portfolio of cable networks.”
Interestingly, the spinoff network would not include NBC, nor would it include anything via the NBC-themed streaming service Peacock. But it would include MSNBC, CNBC, the USA Network, Bravo, E! SyFy, and Oxygen True Crime. But even as Cavanagh noted that such a project would be “well-capitalized,” it is easy to remember that fewer and fewer people are actually watching linear television and are migrating to streaming services.
A Growing Internet Problem
But Comcast is also facing some troubles on the internet side of things, as demonstrated by the recent release of Call of Duty: Black Ops 6. The highly popular video game featured a patently massive download to go with it: 102 gigabytes for the PC version alone. The PlayStation version will come in at a somewhat more sedate 84.4 gigabytes.
Comcast took this ball and ran with it, noting that, between the game and Thursday Night Football streams, this was its “biggest week in internet history.” The game alone represented about 19% of Comcast’s overall server traffic. But, as a report in The Verge pointed out, Comcast is still running under a 1.2 terabyte data cap. It shut that cap down for COVID-19 restrictions, but reports note it is back. And with more people streaming than ever…that cap is starting to look more like a problem than ever.
Is Comcast Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CMCSA stock based on four Buys and five Holds assigned in the past three months, as indicated by the graphic below. After a 7.29% rally in its share price over the past year, the average CMCSA price target of $47.11 per share implies 8.2% upside potential.
