Wells Fargo & Company: Linkage and platform business prospects are worrying, downgraded Comcast Corporation Class A (CMCSA.US) to "hold."

Wells Fargo & Company has downgraded the rating of media and cable television giant Comcast Corporation Class A (CMCSA.US) from "hold" to "underperform", with a target price reduced by $6 to $31. Wells Fargo & Company believes that Comcast Corporation Class A is no longer defensive as the company is being drawn into a convergence investment cycle, with increasing mobile costs to re-accelerate its broadband business. Wells Fargo & Company believes that Comcast Corporation Class A's Connectivity & Platforms business will continue to face pressure, with EBITDA expected to decline by -1.7%/ -0.2% in 2025/ 2026, and net user additions expected to be -500,000/ -420,000, respectively. Wells Fargo & Company stated: "Although fiber network net additions are expected to remain stable this year, we believe that the resistance faced by the fiber business is increasing due to the cumulative effects of excessive construction in the past 5 years and measures to accelerate penetration." Wells Fargo & Company also expressed: "Connectivity & Platforms business is the most important source of revenue for Comcast Corporation Class A, and this business faces fierce competition from the overbuilt fiber market. In response, we expect Comcast Corporation Class A to invest in mobile + band convergence packaging, which will lower growth rates and require time/ risk to see returns in user trends." Wells Fargo & Company further believes that NBCUniversal under Comcast Corporation Class A will be affected by a weak advertising market, with expected rise in sports costs for NBA, and the Peacock streaming business will struggle to achieve profitability.