Market Overview

T-Mobile's 'Netflix On Us' Initiative Isn't Enough To Warrant An Upgrade From Deutsche Bank

Share:
T-Mobile's 'Netflix On Us' Initiative Isn't Enough To Warrant An Upgrade From Deutsche Bank
Related NFLX
Pro: Netflix's Infamy As IPTV Sector Killer Could Continue
Benzinga's Top Upgrades, Downgrades For September 21, 2017
Largest Insider Trades of the Week (GuruFocus)
Related
AT&T, Verizon The Likely Winners In The Event T-Mobile-Sprint Deal Rumors Ever Come To Fruition
Mike Khouw Sees Unusual Options Activity In Sprint
Sprint Short Interest A Mystery As T-Mobile Merger Talk Heats Up (Investor's Business Daily)

T-Mobile US Inc (NASDAQ: TMUS)'s announcement on Wednesday that it will be giving away a free Netflix, Inc. (NASDAQ: NFLX) membership to customers of certain data plans appears to be compelling to customers but isn't good enough to impress Deutsche Bank's Matthew Niknam.

Niknam maintains a Hold rating and $70 price target on T-Mobile's stock as the announced "Netflix On Us" initiative is a continuation of the company's strategy of giving customers "more bang for the buck." It will also add another differentiating factor over its competitors on top of other offerings including free international roaming, in-flight Wi-fi and plans that include all taxes and fees.

tipranks.png

But the financial implications of the offering can't be ignored, as the package will be accounted for a contra-revenue and will negatively impact the company's postpaid phone average revenue per user.

Overall, T-Mobile's new offering merely adds to the analyst's ongoing cautious stance on T-Mobile's postpaid phone ARPU trajectory amid the highly competitive landscape. But the Netflix deal represents another increased risk to the numbers and a base case scenario implies an approximate 1-percent incremental headwind to postpaid ARPU.

Encouragingly, T-Mobile's new offering won't impact any of the company's prior guidance and Wall Street's expectations.

Related Links:

Netflix Higher Following T-Mobile Deal

T-Mobile May Reflect M&A Upside, But Sustained Competition Merits A Deutsche Bank Downgrade

Latest Ratings for NFLX

DateFirmActionFromTo
Sep 2017BuckinghamInitiates Coverage OnBuy
Jul 2017Credit SuisseMaintainsNeutral
Jul 2017RosenblattUpgradesNeutralBuy

View More Analyst Ratings for NFLX
View the Latest Analyst Ratings

Posted-In: Matthew Niknam NetflixAnalyst Color News Top Stories Analyst Ratings Media General Best of Benzinga

 

Related Articles (NFLX + TMUS)

View Comments and Join the Discussion!
Loading...
Loading...