Comcast silences the NBCUniversal skeptics
The cable giant assumes full control of the entertainment conglomerate for $16.7 billion.
Wall Street was singing a different tune Wednesday after the cable giant agreed to buy General Electric's (GE) remaining stake in NBCUniversal for $16.7 billion.
"Comcast got it at a steal, a phenomenal price," said Wunderlich Securities analyst Matthew Harrigan in an interview with Bloomberg News. He rates the Philadelphia company as a "buy" and thinks that NBCUniversal is still undervalued.
Shares of Comcast, the largest cable company, rose 5% Wednesday, in part because it is buying out General Electric earlier than anticipated. GE shares were up nearly 3%; the stock was the biggest gainer in the Dow Jones Industrial Average.
At the time of the 2009 deal, memories of Comcast's 2004 unsuccessful takeover bid for Walt Disney (DIS) were still fresh in the minds of some investors. Moreover, NBC was stuck in fourth place among broadcast networks. To top it off, there weren't many synergies between NBCUniversal and Comcast.
Comcast, though, was able to do something that Wall Street didn't expect -- turn NBC around. The network has scored huge hits from "The Voice" and Sunday night football programing. These days, the Peacock Network is No. 2 in the ratings behind CBS (CBS) both in total viewers and those aged 18 to 49, the demographic targeted by advertisers, according to Bloomberg News.
Challenges remain at NBC. The New York Post recently noted that the network's ratings have plunged since the start of the year because it wasn't able to count on "The Voice" or football. Both Roberts and Wall Street seem to think that the ratings will come back. Comcast also is benefiting from improved box-office returns at Universal Pictures and rising attendance at Universal's theme park business.
Wall Street has rewarded investors for their faith in Comcast. Shares of the company have soared more than 142% since 2008, and analysts think the stock has more room to run. The average 52-week price target on the stock is $43.64, about 5% higher than where it currently trades.
In a related development, Comcast also is acquiring NBCUniversal's floors in its iconic 30 Rockefeller Plaza building and CNBC's headquarters building in New Jersey for $1.4 billion. Roberts declined to comment to The Wall Street Journal on whether Comcast would take the GE sign down from the Rockefeller Plaza tower.
That's not surprising. As media moguls go, Roberts is fairly low key. He even enjoyed the gentle ribbing Comcast endured at "30 Rock," according to published reports. The company was founded by his father Ralph in 1963 and still likes to view itself as a family business.
--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
More on moneyNOW
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The major averages ended the midweek session on a flat note after spending the day inside narrow ranges. The S&P 500 hovered near the 2,000 mark for the majority of the trading day, but slumped to new lows during the last hour of action. The index then returned to its flat line, where it settled for the day. For the third day in a row, participation left a lot to be desired with just 487 million shares changing hands at the NYSE.
Equity indices opened with slim gains, ... More
More Market News
The stock rises 9% after the company reveals strong second-quarter results.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'