October 2, 2019
The pending launch of subscription streaming video services from Disney and Apple next month has ratcheted up scuttlebutt Netflix will hemorrhage subscribers to the new players.
Not true, according to a new survey conducted by Wall Street firm Piper Jaffray — a perennial bull on Netflix shares.
“Our survey [of 1,500 respondents] suggests that the majority (~75%) of Netflix subscribers do not intend to subscribe to either Disney+ or Apple TV+,” analyst Michael Olson wrote in a note as reported by CNBC.
Olson contends many Netflix subs will try at least one of the new services. Indeed, Netflix co-founder/CEO Reed Hastings has stated publicly that he intends to subscribe to Disney+.
“Most existing Netflix subs appear to be trending towards multiple streaming video subscriptions, especially as many continue to reduce their spend on traditional TV offerings,” Olson said.
Netflix shares have fallen from historic highs over the past 90 days since it reported poor Q2 subscriber growth numbers worldwide. Indeed, the downturn has erased all fiscal gains in 2019.
The company’s stock was trading at $262 a share at noon Oct. 3 (Eastern Time), about 59% of Piper Jaffray’s target of $440 per share.
“[It] now trades at multiyear valuation lows, suggesting shares reflect much of the upcoming competition risk and periodic sub add volatility,” Olson wrote.