[ad_1]
This is the calm before the storm when the streaming video giant Netflix Inc. will release its second quarter financial results on Wednesday after market close.
For now, Netflix is the recognized leader in the streaming market with over 150 million members worldwide. His stock
NFLX, -1.65%
is up about 40% this year at $ 373 per share, versus a gain of about 19% for the S & P 500. And its hit show, "Stranger Things," has just start his third season.
But it can not be too comfortable. Netflix is facing much tougher competition in the US later this year from some of the biggest brands of content. Apple Inc.
AAPL, + 0.77%
and Walt Disney Co.
DIS + 0.92%
plans to launch subscription services in 2019. AT & T Inc.
T + 0.57%
subsidiary WarnerMedia, and Comcast Corp.
CMCSA, + 1.27%
NBCUniversal should follow in 2020.
Netflix ignores all ideas, it faces a formidable glove of potential rivals. In recent months, the company has changed its definition of competitors.
"We are competing (and losing against) Fortnite more than HBO," the company said in its letter to shareholders for the holiday quarter. Netflix's attention "does not focus on Disney +, Amazon or others, but on how we can improve our experience for our members."
Do not miss: How Vimeo abandoned its battle against YouTube and turned commercial-free videos into a real business
It's a state of mind that analysts have a hard time believing.
"As invincible as Netflix may seem, this is not the case," said Peter Csathy, founder of CREATV Media, in an information bulletin this year. "SVOD Disney, Apple and WarnerMedia [subscription video on demand] arrive later this year – joining Amazon and a host of others who are already determined to take Netflix seriously … or more. So, this year, Netflix will be challenged like never before. And investors will feel it. "
Disney could be the biggest threat. His next service, Disney +, dubbed "Netflix Killer", contains some of the most popular and valuable content from the entertainment world. With $ 7 a month, about half the cost of Netflix's standard plan, it's a tempting alternative. Last month, UBS Securities calculated that about 43% of respondents in the US were interested in a Disney + subscription. Another study conducted by research companies Streaming Observer and Mindnet Analytics in late April estimated that 14% of Netflix subscribers would consider dropping the streaming service to Disney +.
The concern of investors is the possibility that Disney, Warner Bros. and Comcast remove their content from Netflix and do not renew the license agreements, which would deprive Netflix of nearly 20% of its total content library in terms of hours of programming, according to the Analysis in Amps data. Netflix is already facing the loss of two sitcom libraries that have proven to be the favorites of its audience.
See: Analysts believe media companies take a wrong approach by catching Netflix
"The Office" closes when Comcast's Netflix with NBCUniversal contract expires at the end of 2020. NBCUniversal's next consumer direct-to-consumer platform will be the exclusive home of comedy, starting in 2021. Netflix's $ 100 million contract to keep WarnerMedia's only "Friends" HBO Max will begin broadcasting all episodes of the show in the spring of 2020.
Lily: Do not worry, AT & T will not ruin HBO, analysts say
This could force Netflix to replace this programming void with expensive content. The company based in Los Gatos, California, spent $ 12.04 billion in content last year, up 35 percent from $ 8.9 billion in 2017, according to its results report. fourth quarter of 2018. Wall Street analysts expect an increase of $ 15 billion in 2019. John Blackledge, an analyst at Cowen, estimates that a 52% increase in original programming from one year on the other will serve as a "downwind" for strong second quarter results. (He maintains an outperformance rating and a price target of $ 455.)
"The loss of" Friends "and" Office "is not so bad that the company can redeploy the expenses on the originals, which could slow down the growth of the budget," said Nat Schindler, an analyst at the Bank of America Merrill Lynch, in a note dated July 12, in which he affirmed a purchase price and a price target of $ 450.
Nevertheless, analysts such as Michael Morris of Guggenheim remain sold on Netflix's earnings trajectory.
"While our major competitors are looking to aggregate their internal programs, we believe that new, globally exclusive content differentiates Netflix from entertainment solutions, including traditional competitors (ie Turner, Warner). and Disney) and novice competitors (PlutoTV and Apple TV +). exploit the contents of the library, "Morris said in a July 8 post, while maintaining a purchase goal and a $ 420 price.
What to expect
Earnings: Of the 37 analysts polled by FactSet, Netflix is expected to post an average adjusted earnings of 56 cents per share, up from 55 cents per share expected at the beginning of the quarter.
Estimize, which relies on estimates from both buy-side and sell-side analysts, fund managers, academics and others, forecasts EPS of 63 cents based on 190 estimates.
Returned: Wall Street is expecting a $ 4.9 billion turnover from Netflix, according to 34 analysts surveyed by FactSet. Analysts are looking for additions of 5.1 million global streaming service subscribers, according to FactSet, on national additions of 350,000 and international additions of 4.8 million. Netflix reported revenue of $ 3.9 billion in the second quarter of last year, generating diluted earnings of 85 cents per share and 5.45 million new subscribers to the online streaming service .
Estimize also forecasts revenues of $ 4.9 billion.
Of the 40 analysts who cover Netflix, 29 have a purchase or overweight rating, 9 a holding rating and 2 a sales note, with an average price target of $ 412.42, according to FactSet data. .
Movement of stock: Netflix shares rose about 40% this year through Thursday's close at $ 379.50 per share, compared with a gain of about 20% for the broad S & P 500.
SPX, + 0.46%
The Netflix stock is down 6% in the last 12 months.
See now: Stranger Things comedian Millie Bobby Brown named the new Converse collection
[ad_2]
Source link