Market Overview

4 Reasons Why Netflix's Stock Has Outperformed The Market

4 Reasons Why Netflix's Stock Has Outperformed The Market

Shares of streaming giant Netflix Inc (NASDAQ: NFLX) have outperformed the broader market, rendering its valuation less attractive. An analyst at Imperial Capital zeroed in four reasons for the strong showing.

The Netflix Analyst: David Miller downgraded shares from Outperform to In-Line but maintained the price target at $489, suggesting about 2.5% upside from current levels.

The Netflix Thesis: Netflix shares rallied 14.8% in the first quarter compared to the 20.6% drop for the S&P 500 Index, and thus far in 2020, the stock has jumped 50.2% as opposed to the 3.3% drop for the S&P 500 Index, Miller said in a Monday note.

  1. Netflix, according to the analyst, is one of very few names in the S&P 500 Index that is for the most part impervious to any economic effects of COVID-19. The price point for each service iteration is mostly recession-resistant, and consumption of content is not communal, he reasoned.
  2. The company doesn't have exposure to any assets in the media sector under secular threats such as cable networks, nor assets affected by COVID-19 such as theme parks or movie theaters, Miller said.
  3. Miller noted Netflix has disproved "Street-group-think" that the launch of Walt Disney Co's (NYSE: DIS) Disney+ in the fourth quarter would lead to market share erosion, forcing it to lower prices.
  4. Finally, the analyst is of the view Netflix has efficiently differentiated itself from rival Disney+ in that "Disney+ is largely a myriad of American entertainment 'brands' exported globally, while NFLX is, for the most part, a smorgasbord of global shows from almost every country cross-pollinated all around the world."

Netflix Price Action: In pre-market trading Monday, Netflix shares were edging up 0.6% to $479.90.

Related Links:

Will Amazon Or Netflix Buy A Movie Theater Chain?

Why Growth In Latin America Matters For Netflix

Latest Ratings for NFLX

Jul 2020SunTrust Robinson HumphreyMaintainsBuy
Jul 2020Piper SandlerMaintainsOverweight
Jul 2020Morgan StanleyMaintainsOverweight

View More Analyst Ratings for NFLX
View the Latest Analyst Ratings


Related Articles (NFLX + DIS)

View Comments and Join the Discussion!

Posted-In: David Miller Disney Plus Disney+Analyst Color Downgrades Top Stories Analyst Ratings Tech Best of Benzinga

Latest Ratings

UBERRBC CapitalMaintains50.0
WIXJMP SecuritiesMaintains363.0
CVIJP MorganInitiates Coverage On22.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at