After Disney+ launched late last year, folks felt that Netflix would take a hit. However, rumors of their demise have been greatly exaggerated as Netflix has hit an all-time high with their stock nearing $500. A reported on Monday released by The Hollywood Reporter stated,
“Thus far, for 2020, Netflix’s shares have risen 50.2 percent, versus the S&P 500, which is down 3.3 percent,” the analyst highlighted. “In the last 18 months, shares of Netflix are up 81.6 percent, versus the S&P 500, which is up 26.1 percent.”
In regards to the reason for the spike in price, Imperial Capital analyst David Miller stated,
“this is one of a very few names in the S&P 500 which, for the most part, is impervious to any economic effects of COVID-19, as the price points for each service iteration are mostly recession-resistant and consumption of content is not communal,” he said, estimating that “an incremental $184 per share of equity value has been created simply due to the advent of COVID-19,”
“has no exposure to any assets in the media sector under secular threat, such as cable networks, nor assets directly affected by COVID-19, such as theme parks or movie theaters,” Miller highlighted.
“has largely debunked what we viewed as ‘Street group-think’ going into the launch of Disney+ in the fourth quarter of 2019, which was that Disney+ was going to ‘take share’ from Netflix and force Netflix to lower its prices.”
Finally, Netflix shares have outperformed as the company has “efficiently differentiated itself from its arch rival Disney+ in that Disney+ is largely a myriad of American entertainment ‘brands’ exported globally, while Netflix is, for the most part, a smorgasbord of global shows from almost every country cross-pollinated all around the world,”
