Not Wild About Comcast’s Wet ‘n Wild Theme Park Business

Comcast (NASDAQ:CMCSA) holds a controlling stake in NBCUniversal, which also runs theme parks apart from its cable networks and broadcasting businesses, but theme parks are hardly a business that matter to the company. We estimate that NBCUniversal as a whole accounts for about 16% of Comcast’s value. Within this, the theme parks & resorts business is minuscule, constituting less than 3% of NBCUniversal’s revenue. Compared to Disney’s (NYSE:DIS) theme parks & resorts, Comcast’s Universal Studios Hollywood theme park and Wet ‘n Wild water park are tiny.

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Factors that can improve NBCUniversal’s theme park revenues

Price hikes are a possibility as the economy improves as tickets form a major portion of visitor spend. In 2011, Disney hiked ticket prices for its theme parks which was soon followed by price hikes from Universal Studios, Orlando. Such price hikes seem possible as the economy is in a better state now than it was a couple of years ago. In addition to the above, consumers are likely to spend more on food, beverage and merchandise as the economy betters, and the absolute visitor numbers will also increase.

However, the direct financial impact is little even if the economy rebounds completely, as you can see by modifying the forecast above. Nevertheless, Comcast will have an opportunity to market its other services by closer engagement with visitors at its theme parks.

Our price estimate for Comcast stands at $26.60, implying a discount of about 15% to the market price.

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