Comcast shares fell nearly 13% on Friday after a Deutsche Bank downgrade wiped out the previous day’s post-earnings gains. The stock had risen on Thursday after the company beat first-quarter estimates.
Why it matters: Comcast is the largest cable company in the United States. Its struggle to hold broadband subscribers against fibre and fixed wireless competitors signals a structural shift in how Americans connect to the internet.
The earnings
Comcast reported Q1 revenue of $31.5 billion, up 5.3% from $29.9 billion a year ago and above the analyst consensus of $30.4 billion. Adjusted earnings per share came in at 79 cents, beating the 73-cent estimate.
The company lost 65,000 broadband subscribers during the quarter. That is a significant improvement from the 183,000 lost in the same period last year and marks the first year-over-year improvement since 2020.
The downgrade
Deutsche Bank analyst Bryan Craft cut Comcast to hold from buy and trimmed the price target to $34 from $35. According to Craft, broadband competition from fibre providers and fixed wireless services will pressure earnings and free cash flow from 2027 onward.
The downgrade landed the morning after the earnings beat, triggering a sharp reversal.
Streaming and TV
Peacock reached 46 million paying subscribers, up from 44 million in Q4 and 41 million a year ago. The streaming service added subscribers after gaining NBA games and benefiting from the Winter Olympics.
However, Peacock posted a $432 million quarterly loss. Comcast executives said the service would approach profitability for the first time in Q2.
Cable TV losses continued at 322,000 customers for the quarter, down from 427,000 a year ago.
What happens next
Comcast faces a choice between defending legacy cable subscribers and investing in the fibre buildout needed to compete. Analysts will watch whether the broadband loss improvement can be sustained as fibre and fixed wireless networks expand into more Comcast markets.