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Comcast Added to 'Conviction Buy' List at Goldman

Citing the company's "best-in-class operating trends" and ability to turn around the NBC broadcast business, Goldman Sachs has added Comcast to its conviction buy list and increased its price target.

Comcast corporate headquarters in Philadelphia, Pennsylvania.
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Comcast corporate headquarters in Philadelphia, Pennsylvania.

Goldman pointed out in a note to clients that Comcast, which earlier this year complete its acquisition of CNBC.com parent NBC Universal, is a "controversial stock" in part because of its acquisition moves.

But the firm is positioned for growth and will use strong performance in its cable and broadband businesses to provide value to investors in the year ahead, Goldman said.

"We believe Comcast is a high quality asset, with an attractive growth profile and best-in class near-term cable metrics," the note said. "Despite this, the company currently trades at industry low valuation multiples."

Comcast's price target has been raised to $31, a 31 percent move from current levels.

The company is expected to double share buybacks in the year ahead and provide a dividend hike of 15 percent, on top of this year's 19 percent.

Also, Goldman said Comcast is well positioned defensively and has reduced its cable subscriber losses.

Finally, the company is expected to turn around the flagging ratings at NBC broadcast, which has had recent successes most notably in "The Voice" singing competition show.

"We believe the opportunity for a turnaround is reliant upon stronger primetime programming at the NBC network, which is unlikely to be achieved without some near-term spend," Goldman said. "Though ratings improvement will necessitate significant primetime overhauls, including the 10 pm slot, we note recent introductions, most notably 'The Voice,' have been successful and could drive improvements in the 2011-2012 season."

Comcast shares rose 1.6 percent in premarket trading.

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