Investors have lately hit the “pause” button on Netflix shares. They have dipped 6% to start the year, ending last Friday at $497.98, a good amount below the 52-week high of $575.37 established last July. While bulls clearly outweigh bears on Netflix, many skeptics point to its recent price hikes and flattening growth in the U.S. as sources of concern.
Morgan Stanley’s Benjamin Swinburne reiterated his “overweight” rating on Netflix shares, with a $12 month price target of $650. In a note to clients, he highlighted “ample free cash flow generation in 2022 and beyond” as well as a surge of more than 70 original feature films, which should reinforce pricing power. The company’s investment in local original programming around the world also offers a “long runway” for continued addition of subscribers.
Disney has estimated similar numbers by then with Disney+, but churn and revenue per user are at inferior levels to Netflix thus far. HBO Max, meanwhile, is eyeing 75 million to 90 million subscribers by 2025, about two-thirds of them in the U.S. “We prefer Disney for two reasons,” Bazinet wrote in a note to clients. “First, as a late entrant, we think Disney has a quicker and easier path to sub growth over the next three years. Second, we suspect Netflix may have some hiccups over the next few quarters as price hikes potentially dampen quarterly net adds, tactically disappointing the Street. Disney, on the other hand, is apt to keep prices relatively stable.
1 Like Always
TriploF
They will do fine. They are entrenched culturally and developing films globally. World leader. They haven't done any self sabotage.. they good. For a long long time.
They'll do just fine!
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