FOX Business’ Susan Li breaks down the possibility of Netflix losing ratings and subscribers due to streaming competition.
Netflix’s “The Irishman” has been getting all the attention, perhaps masking some pessimism on Wall Street about the company’s future.
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| NLFX | n.a. | n.a. | n.a. | n.a. |
| SP500 | S&P 500 | 3132.52 | -3.44 | -0.11% |
| I:COMP | NASDAQ COMPOSITE INDEX | 8616.183466 | -5.64 | -0.07% |
The streaming giant’s new movie “The Irishman” was watched by 26.4 million households during its first week, chief content officer Ted Sarandos said at an industry conference. The 3.5-hour epic nabbed 17 Golden Globe nominations while Netflix as a whole secured 34.
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That wasn’t enough to keep Wall Street happy, which downgraded Netflix on Tuesday for the fourth time in two months.
Shares slipped over 3 percent, while the broader markets were little changed.
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“We project Netflix will lose 4mm US subs in 2020 at its premium-priced tier of $9-$16/month,” Needham and Company analyst Laura Martin wrote while downgrading shares to “underperform.”
“We believe Netflix must add a second, lower-priced, service to compete with Disney+, Apple+, Hulu, CBS All Access and Peacock, each of which have $5-$7/month choices” she added.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DIS | WALT DISNEY COMPANY | 146.10 | -0.11 | -0.08% |
| AAPL | APPLE INC. | 268.48 | +1.56 | +0.58% |
| HULU | n.a. | n.a. | n.a. | n.a. |
| CBS | n.a. | n.a. | n.a. | n.a. |
| CMCSA | COMCAST CORP. | 42.77 | -1.12 | -2.55% |
Martin said U.S. subscribers generate about three times the profit as international customers.
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Also last week, Citi analyst Jason Bazinet assumed coverage of Netflix with a “neutral” rating and $325 price target, warning that the Wall Street consensus was “too high.” He cited a lack of operating leverage.
Wall Street analysts surveyed by Refinitiv have a 12-month price target of $361 a share. Twenty-seven of the 44 analysts surveyed say “buy” while just five suggest “sell.”
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Netflix shares have gained 13 percent this year, lagging the S&P 500’s 25 percent gain.
