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Should You Buy Comcast (CMCSA) Ahead of Winter Olympics?

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The Winter Olympic Games in Pyeongchang, South Korea are officially underway, but NBC’s extensive coverage kicks off in earnest Thursday night, with the Opening Ceremony extravaganza scheduled for Friday evening. The two-week Olympic run is hugely important to NBC Universal and its parent company Comcast (CMCSA - Free Report) , meaning this could be a great moment for investors to tune in.

Big Spenders

The Olympics, maybe even more so than its prestigious Sunday Night Football coverage, can make or break NBC’s year. Advertisers clamor to cover these prime-time events—though they will be on tape delay this year due to the time difference—and NBC promotes its coverage for months, on top of spending billions of dollars for the broadcast rights.

NBC purchased the rights for the five Olympics from 2000 to 2008 for $3.5 billion. Then the television giant outbid Fox (FOXA - Free Report) and Disney’s (DIS - Free Report) ABC & ESPN when it paid $820 million for the 2010 Winter Games and $1.18 billion for the 2012 Summer Olympics.  The company then spent $4.38 billion to land the four Olympics from 2014 to 2020.

Sensing how much more valuable live sports and “must-watch TV” will be in the age of Netflix (NFLX - Free Report) , NBC Universal spent $7.75 billion to land the exclusive U.S. broadcast rights to the six Olympic Games from 2022 to 2032. In total, NBC has spent or committed over $17 billion dollars on domestic broadcast rights.

With all of this said, the spotlight will be on NBC over the next two weeks, which makes it a great time to consider scooping up its parent company Comcast. 

More Fundamentals

NBC secured $1.2 billion in national advertising sales for its converge of the 2016 Summer Olympics in Brazil. Overall, NBC’s coverage of the last Olympics generated $1.6 billion in revenues, according to Comcast financial releases. Just today, NBC announced that it secured $900 million in domestic advertising dollars for this year’s games in South Korea, which marks a record for the Winter Games.

Looking ahead, our current Zacks Consensus estimates call for Comcast’s first quarter 2018 revenues to pop 10% and hit $22.55 billion, which will include Pyeongchang-generated sales. On top of that, the cable and internet power is expected to see its quarterly earnings surge 13% year-over-year.

Investors should also be excited to note that Comcast has seen complete agreement on its slew of recent upward earnings estimate revisions for the upcoming two quarters. Comcastis also projected to expand its EPS figure at an annualized rate of 10.60% over the next three to five years, which is rather impressive for a company of its size.

Comcast has also matched or topped earnings estimates in 15 of the last 16 quarters. But shares of Comcast currently rest over 13% below their 52-week high—and this dip can be attributed, in large part, to the recent market-wide sell-off.

Comcast is currently a Zacks Rank #3 (Hold) and also sports a solid overall “B” VGM grade, as well as an Earnings ESP (Expected Surprise Prediction) of 3.01%—which means that analyst sentiment has been even stronger recently.

The Olympics don’t make up a very large portion of Comcast’s overall revenues, but during Olympic years, the company does experience a substantial uptick. Coupled with its strong first-quarter 2018 estimates, now might not be a bad time to think about grabbing Comcast amid this current downturn.

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