Baird analyst William Power today lifted his rating on Netflix to Outperform from Neutral, boosting his target price from $350 to $415. Power also cut his ratings on both AT&T and Comcast from Outperform to Neutral. Power reasons that the lack of live sports and growing economic pressures due to the COVID-19 coronavirus pandemic are likely to accelerate cord-cutting — making Netflix a “key beneficiary” to such an accelerated trend.
Power writes that Netflix’s view that it continues to take market share from linear TV “never looked truer,” with recent survey results suggesting “strong current subscriber trends.” He adds that while he “had previously been concerned with pricing power due to new entrants like Disney, Apple, etc., we believe the narrative could shift toward greater revenue leverage from subscriber upside.”
Power contends that Netflix will be “one of the pre-eminent stay-at-home winners, with the current environment enabling it to widen its global lead.
MacDailyNews Take: Such a trend of accelerated cord-cutting due to the lack of live sports would benefit not only Netflix, but also Disney, Hulu, HBO, Apple, etc.