Netflix, Inc. NFLX is getting mixed looks from the sell-side ahead of its April 16 first-quarter print, with KeyBanc Capital Markets predicting that earnings and the streaming company's outlook should remain solid, while Wedbush remains bearish on the prospect of content loss.
The Analysts
Michael Pachter reiterated an Underperform rating on Netflix with a $165 price target.
Andy Hargreaves kept a Sector Weight rating on the stock.
Wedbush Eyes Disappearing Content
Over the next year, Wedbush and other sell-side analysts expect large amounts of existing content to no longer be available on Netflix.
Competitors are proliferating: Walt Disney Co. DIS will launch Disney Plus, AT&T Inc. T’s Warner Bros. plans a streaming service and Comcast Corporation CMCSA’s NBC Universal also plans a proprietary service next year.
Wedbush estimates Disney and its partner Fox, Warner Brothers and NBC together provide around 40 percent of Netflix’s overall content by hours viewed.
When those companies start their own services, much of that programming will likely disappear from Netflix, Pachter said in a Thursday note.
“We think that the company will find replacing the content with originals a daunting task," the analyst said.
KeyBanc: No Big Impact On Subs
More often than not, Netflix exceeds its outlook for global paid subscribers, Hargreaves said in a Wednesday note. And new competition for programming and viewers won't change that, he said.
"While other services may carve out valuable add-on positions, we do not expect the launch of new services from Apple Inc. AAPL, Disney, AT&T or others to meaningfully impact Netflix's subscriber results over the next year."
Earnings Next Week
Netflix will report first-quarter results after the market close on Tuesday, April 16. Wedbush and Keybanc both project first-quarter revenue of $4.49 billion and EPS of 59 cents, in-line with the Street consensus and company guidance.
Price Action
Netflix shares were trading up 0.81 percent at $366.98 at the time of publication Thursday.
Related Links:
Netflix Analyst Remains Bullish Ahead Of Q1 Print, But Expects Near-Term 'Noise'
Bank Of America Thinks Netflix Will Be Just Fine Following Apple TV+ Entrance
Photo courtesy of Netflix.
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