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Comcast's (CMCSA) Despicable Me Animated Franchise Crosses $5B

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Comcast’s (CMCSA - Free Report) Despicable Me becomes the first animated franchise to hit $5 billion globally. Its latest animated film, Despicable Me 4, was released during the Jul 4 weekend.

The film earned more than $230 million worldwide on the opening weekend, becoming the No.1 film globally. Gru, a reformed supervillain, is played by Steve Carell, against the bad guy Maxime Le Mal, played by Will Ferrell.

This franchise also includes Minions, which is one of the highest-grossing animated films of all time, as well as the Academy Award-nominated Despicable 2 and Despicable 3. These movies made more than $1 billion each at the box office.

Minions 3 is set to release in June 2027. Academy Award nominee Pierre Coffin will direct this movie. He was also the director of the first three Despicable Me films and the first Minions film. The film will be produced by Illumination’s founder and CEO, Chris Meledandri, and Bill Ryan.

Comcast’s Strong Partner Base Aids Long-Term Prospects

Comcast’s latest success of Despicable Me franchise is supported by a strong partner base of the company. This partner base is expected to aid the long-term prospects of CMCSA.

Comcast recently entered into a partnership with the University of Notre Dame. Notably, Notre Dame joined a distinguished partner consortium that includes NBC Sports, Sky Sports, Comcast Spectacor, NASCAR, Premier League, PGA Tour and three U.S. Olympic sports organizations. Comcast connects founders with partners to develop collaborations and enhance companies’ products and services.

CMCSA also partnered with Starlink, which provides connectivity solutions to Comcast Business enterprise customers. This collaboration also provides fast and reliable connectivity for a range of business applications for enterprise customers, even in underserved locations.

Additionally, the company also has a collaboration with Yardi. This partnership integrates high speed Internet services to Xfinity Communities. Furthermore, CMCSA also introduced NOW Internet and NOW Mobile, which feature low-cost, contract-free options and are powered by the company’s robust network infrastructure, ensuring flexible and accessible connectivity solutions nationwide.

However, CMCSA faces tough competition from streaming service providers, including Netflix (NFLX - Free Report) , Disney’s (DIS - Free Report) Disney+ and Apple’s (AAPL - Free Report) Apple TV+. In the theme park segment, the company faces competition from Disney.

Shares of this Zacks Rank #3 (Hold) company have lost 9.7% year to date compared with the Zacks Consumer Discretionary sector’s decline of 1.1%. The stock has also underperformed Netflix, DIS and Apple’s return of 34.8%, 9.1% and 22%, respectively, in the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Conclusion

Comcast’s strong partner base and the immersive success for its movie are major catalysts. However, competition remains a concern for the company.

A leveraged balance sheet is a major concern. As of Mar 31, 2024, cash and cash equivalents were $6.58 billion, which increased from $6.21 billion as of Dec 31, 2023. As of Mar 31, 2024, consolidated total debt was $96.5 billion compared with $97.09 billion as of Dec 31, 2023.

The Zacks Consensus Estimate for CMCSA’s second-quarter 2024 earnings is pegged at $1.11 per share, which has declined a cent in the past 30 days. The consensus mark for third-quarter 2024 earnings is pegged at $1.15 per share, which has declined a cent in the past 30 days.

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