Janney Capital starts Comcast at 'Buy'

Tue, 09/11/2012 - 3:23pm
The Associated Press

Janney Capital analyst Tony Wible initiated coverage of Comcast on Tuesday with a "Buy" rating, saying long-term technology trends are blowing in the cable company's direction.

Comcast, the country's largest cable company, should benefit from the move toward usage-based billing for broadband, Wible wrote. Charging by the gigabyte could encourage more households to sign up for cheap, basic tiers and start to bring in more money if wealthier households start adopting data-hungry "4K" or "Ultra HD" TV sets, which have four times the resolution of standard HD sets.

LG and Sony are set to sell "4K" TV sets this year, but as yet, there is very little video content available at that resolution.

Wible notes that Comcast is expanding into security and home automation services and believes it could add more services, like online file storage for consumers.

Comcast also has an opportunity to lower its costs if it starts to use Internet technology to distribute video, Wible wrote. That could also allow it to become more flexible and offer new services faster.

The two-way capability of cable networks means they are in a position to regain market share lost to satellite TV services, which are one-way, Wible wrote.

On the downside, the critical role of cable means that regulators will be taking a closer look at it and could expand oversight by the Federal Communications Commission, he noted.

Comcast shares rose 25 cents, or 0.7 percent, to $34.49 in midday trading. The shares are close to their 13-year high of $35.16, hit a month ago.


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