Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

The Netflix Effect Is Only Half The Story For Disney

Courtesy of Benzinga.

The Netflix Effect Is Only Half The Story For Disney

Walt Disney Co (NYSE: DIS) shares have been drifting lower by more than 7.7 percent since the beginning of the month, and some investors have attributed much of the weakness to the company’s recent announcement that it is pulling its content from the Netflix, Inc. (NASDAQ: NFLX) platform and launching its own streaming service. According to Loop Capital analyst David Miller, the Netflix decision is only “half the story.”

Disney shares are down roughly 5 percent since the company reported fiscal Q3 earnings. On Wednesday, Miller said those earnings revealed more weakness from ESPN and ABC’s advertising businesses, earnings dragged down by further BAMTech investment and a new streaming service that leaves investors with more questions than answers.

While Disney seems to be following in the footsteps of traditional TV giant CBS Corporation (NYSE: CBS) in launching its own streaming service, Miller said Disney faces a more difficult situation than CBS.

“For purposes of comparison, it took CBS a little over two years to get to 4.0mm subs split between Showtime OTT and CBS All Access, and CBS doesn’t have cord-cutting issues, so that venture was super-accretive,” he wrote (see Miller’s track record here).

Related Link: Netflix: Buy The Disney Dip

Loop estimates that Disney would need 6 million streaming subscribers at a price of $4.99 per month to offset the 3-percent loss rate of viewers due to cord-cutting.

Disney simply has too many unknowns at this point for Loop to be bullish on the stock.

However, Rosenblatt Securities analyst Alan Gould said this week that investor should be swooping in to buy Netflix stock following its recent dip.

Rosenblatt has a Buy rating and $200 price target for Netflix, and Loop has a Hold rating and $107 price target for Disney.

Latest Ratings for NFLX

Date Firm Action From To
Jul 2017 Credit Suisse Maintains Neutral
Jul 2017 Rosenblatt Upgrades Neutral Buy
Jul 2017 Nomura Maintains Buy

View More Analyst Ratings for NFLX


View the Latest Analyst Ratings

Posted-In: Analyst Color Earnings Long Ideas News Price Target Reiteration Analyst Ratings Trading Ideas Best of Benzinga


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!