Published a Comcast DCF last week with sum-of-parts spinoff scenario at $55-75. This morning they announced the NBCUniversal spinoff. Full methodology below.
Background: I run a Substack where I pull 16 years of SEC XBRL data on roughly 1,700 tickers and build true FCF screens — operating cash flow minus CapEx minus SBC. Last week I published a detailed DCF on Comcast. This morning they announced the NBCUniversal spinoff. The stock is up 20%+ in premarket. Here's the full analysis.
**The starting FCF problem**
Comcast reported $19.2B in FCF for 2025 — the highest on record. That number is inflated by two one-time items. Epic Universe completed construction in 2025, reducing CapEx roughly $1.5B below normalized run rate. And SBC of roughly $1.7B needs to be subtracted by your methodology. Normalized starting FCF is $16B.
This matters because if you run the DCF on $19.2B you get a misleadingly high valuation. The bear case has to start from the honest number.
**The bear case DCF**
Assumptions: Starting FCF: $16B normalized Annual decline: 3% for 12 straight years Discount rate: 10% Terminal growth: 2% on the rump business
Year by year:
Year 1: $15.52B FCF / PV $14.11B
Year 2: $15.05B / $12.44B
Year 3: $14.60B / $10.97B
Year 4: $14.16B / $9.67B
Year 5: $13.74B / $8.53B
Year 6: $13.33B / $7.52B
Year 7: $12.93B / $6.64B
Year 8: $12.54B / $5.85B
Year 9: $12.17B / $5.16B
Year 10: $11.80B / $4.55B
Year 11: $11.45B / $4.00B
Year 12: $11.11B / $3.54B
Total PV years 1-12: $92.98B
Terminal value: $11.11B × 1.02 = $11.33B FCF in year 13. Divided by (0.10 - 0.02) = $141.63B terminal value. Discounted back 12 years at 10%: $141.63B / 3.138 = $45.12B.
Total implied equity value: $92.98B + $45.12B = $138.10B Shares outstanding: 3.60B Implied fair value per share: $38.36
**The debt question**
Comcast carries roughly $93B in long-term debt. The annual FCF numbers are already calculated after interest payments — debt service is embedded in the cash flow stream year by year. But in a terminal value context it's worth being explicit. If you strip net debt from the terminal value rather than leaving it embedded:
Terminal value gross: $141.63B Less net debt: \~$89B Terminal equity value: $52.63B PV of terminal equity value: $52.63B / 3.138 = $16.77B
Revised total: $92.98B + $16.77B = $109.75B Per share: $109.75B / 3.60B = $30.49
So the range is $30 debt-adjusted to $38 going-concern, against a $22 price at time of writing. 39% upside in the harshest accounting scenario where the business shrinks 3% annually for 12 years and you deduct the entire debt load.
**The buyback mechanics**
The buyback doesn't appear as a separate DCF line because it's already captured in FCF. The $6.8B annual buyback is a distribution of FCF — same as a dividend but tax-deferred. What it does affect is per-share value.
At 5% annual share reduction for 12 years: 3.60B shares becomes 1.94B shares. Same $138B total equity value divided by 1.94B shares = $71 per share. The buyback concentrates ownership of existing value rather than creating new value. Combined shareholder yield at $22 — 5.31% dividend plus roughly 5% buyback — is approximately 10% annually before any price appreciation.
**The sum-of-parts analysis I published last week**
This is the section that looks prescient this morning. I wrote:
"A company that spun off Versant doesn't seem unlikely to eventually spin off other pieces — broadband infrastructure or Universal Studios as a standalone entity. A pure-play broadband infrastructure business at roughly $16B in annual FCF with 50%+ EBITDA margins would get a utility-like multiple of 12-15x EBITDA. A separate NBCUniversal/Peacock streaming company with sports rights — Sunday Night Football, Premier League, Olympics — gets a media multiple on top of that. Sum of parts in a spinoff scenario is probably $55-75 per share."
This morning Comcast announced exactly that. The spinoff separates broadband, wireless, and business services from NBCUniversal studios, theme parks, Peacock, NBC, Telemundo, Bravo, and Sky.
The key data point from Q1 2026 earnings: Connectivity and Platforms produced approximately 24x the adjusted EBITDA of Content and Experiences. The profit sits overwhelmingly in the broadband business. The content business was dragging down the multiple on the entire company.
**Post-announcement valuation framework**
The remaining Comcast — pure broadband infrastructure — trades as a utility-like compounder. At $16B normalized FCF with 50%+ EBITDA margins and a utility multiple of 12-15x EBITDA, the broadband rump alone justifies $40-55 per share.
The NBCUniversal/Sky spinoff trades as a media company with theme parks and streaming. At 8-10x EBITDA on the content business the media stub adds another $15-25 per share depending on how Peacock and Epic Universe are valued.
Combined: $55-80 per share on sum of parts. The market has moved 20% this morning and is still below the midpoint of that range.
The transaction closes in approximately one year pending regulatory approval. The broadband Comcast will retain a stake in the NBCUniversal entity and monetize it tax-efficiently over time — worth noting as it creates a known future selldown that the media company's shareholders will have to price.
**What I got wrong**
The normalized FCF going forward is complicated by 2026 being Comcast's largest broadband investment year — Project Genesis upgrading infrastructure through 2027. That means FCF will likely be lower than $16B in 2026 and 2027 before recovering as CapEx normalizes. The bear case should probably model $13-14B starting FCF for the next two years before returning to the $16B run rate. That reduces the per-share value modestly but doesn't change the conclusion.
Fixed wireless access from T-Mobile and Verizon is accelerating broadband subscriber losses faster than I modeled. If subscriber losses continue at current pace the 3% annual decline assumption may prove optimistic.
Happy to discuss the methodology, the terminal value assumptions, or the post-spinoff valuation framework. Full piece here: [https://cavemanscreener.substack.com/p/buying-2-for-1-a-comcast-dcf-update](https://cavemanscreener.substack.com/p/buying-2-for-1-a-comcast-dcf-update)
