Comcast (NASDAQ:CMCSA) announces its Q1 2019 results April 25 before the markets open. Analyst sentiment for Comcast stock appears mixed. Some think it will continue its impressive run in 2019, up 18% YTD through April 2. Others aren’t quite so optimistic.

At the bottom of the debate lies as very simple question:

Is Comcast a $35 or $45 stock?

A couple of analysts recently raised their 12-month price targets on Comcast’s stock price.

A Closer Look at Comcast Stock

Raymond James (NYSE:RJF) upped its target price April 1by a couple of bucks to $44 while Evercore (NYSE:EVR) raised its target by two dollars to $46. By these two analysts’ estimate, Comcast is a $45 stock.

What’s driving this belief?

“We are boosting our Comcast target, reflecting our view that the company’s cable operating performance continues to generate both strong subscriber results in broadband and healthy top-line performance,” said Evercore ISI analyst Vijay Jayant.  

Comcast, with the acquisition of Sky last year, is a much different beast than when it reported Q1 earnings in 2018. How different, we’ll know in three weeks.

In February, InvestorPlace contributor Jonathan Berr laid out his bullish case for Comcast stock.

Aside from pointing out the fact that Comcast’s cable business saw revenues increase by 5.2% in the fourth quarter, adding 323,000 net new residential broadband customers (a similar sentiment to the Evercore analyst), the company’s NBCUniversal business increased revenue and adjusted EBITDA by 7.1% and 12.3% respectively year over year.

What’s not to like about those numbers?

However, it’s a recent blog post by Ben Carlson, who does such an excellent job with A Wealth of Common Sense, that makes me think Comcast is a $45 stock.

Carlson discussed his efforts to cut the cord. Drilling down into the actual numbers and what he might save by doing so, he came away unconvinced that the savings were lucrative enough to follow through. I suspect a lot of people including myself are in the same boat.

Carlson wrote April 2:

“There are some savings here, but I would bet my right arm that the cable companies won’t stand for huge losses. They’ll raise internet prices for people who give up on their other services eventually… The cost savings for a similar experience aren’t quite there yet and I don’t know that they will be until Google or Facebook start offering free internet to the world in exchange for our souls.”

Although it’s not an original thought, Carlson is bang-on.

There is not a hope in Hades that Comcast or any of its competitors is going to let its customers cut the cord for free. It isn’t happening.

Add-in the Sky business and Comcast might be a $50 stock.

Comcast Stock Still Has Detractors

Over at RBC Capital Markets, they’re not necessarily negative about CMCSA. Instead, the combination of slower growth combined with a stretched valuation suggests Comcast stock is ready to take a breather.

“We’re taking a more cautious view on Cable sector fundamentals and lower expectations for broadband and video subscribers,” RBC wrote in a March 29 note to clients. “Applying a more modest target multiple drops our target price to $42. In light of our tempered view and the strong share price run, we downgrade Comcast to Sector Perform.”

At the end of the day, RBC believes the cord-cutting threat combined with slower household growth, is evidence that Comcast’s momentum is unsustainable. It estimates that Comcast will lose 126,000 cable customers in Q1 2019 and won’t add nearly as many high-speed internet customers as it initially thought (down 15% from 402,000 to 340,000), putting downward pressure on Comcast’s stock price.

Should Comcast fail to add at least 379,000 net new high-speed internet customers in the first quarter , which is what it added in Q1 2018, there is a real possibility Comcast stock could become a $35 by the end of April.

The Bottom Line on Comcast Stock

Here’s what I said about Comcast in January before announcing its Q4 2018 results:

“The odds are good that Comcast is going to deliver positive results Wednesday morning… The big issue for Comcast stock owners should be the company’s plans for 2019 and 2020 when it comes to debt repayment, subscriber growth and overall customer experience. The revenues and profits should take care of themselves.”

In hindsight, we know Comcast delivered in the fourth quarter.

Can it do it again? I think so. Comcast is a $45 stock.

At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.