Comcast (NASDAQ:CMCSA) spent over $480 million in marketing its Xfinity brand in Q1 2012, making it one of the highest marketing spenders in the U.S.  This represented an increase of 4.3% compared to same period last year.  Even though the company may be one of the biggest advertising spenders in the U.S., the increase in advertising spend is not significant compared to its revenue and overall expense growth.
Marketing expenses are part of Comcast’s SG&A expenses, which is a critical driver of its value. However, given that the SG&A expenses for its cable networks segment amounted to around $7 billion, marketing expenses are a small portion of it. In essence, the news does not hold much significance as far as Comcast’s stock movement is concerned.
Our price estimate for Comcast stands at about $32.50, implying a premium of about 5% to the market price.Notes:
- Comcast boosts ad spending; AT&T, Verizon slash marketing expenditures, FierceCable, June 18 2012 [↩] [↩]