Netflix stock remains stable following the launch of Disney+

Written by: Michael Harris
April 28, 2020
  • Netflix shows little to no impact of Disney+ launch on its subscribers or user base.
  • Credit Suisse recommends going long on Netflix with $440 target in sight.
  • Netflix has lost 15% in the past six months.
  • Douglas Mitchelson says it might be too soon to quantify Disney+ impact on Netflix.

Launched on November 12th, 2019, Disney+ was expected to give a hard time to Netflix and be its staunch competitor. Sources have, however, informed that Netflix hasn’t budged significantly following the release of a new streaming service by Disney. As per the application download data, Netflix has not lost a notable number of subscribers after the launch of the new digital service by Disney. Many experts had warned the Netflix shareholders to be cautious as the things could go ugly for the streaming service’s stock performance if Disney+ had managed to steal Netflix’s userbase. According to the Swiss investment bank, Credit Suisse, however, the recent development highlights that the Netflix shareholders have nothing to worry about for now.

Netflix Shows Little To No Impact Of Disney+ Launch

Douglas Mitchelson of Credit Suisse performed a thorough evaluation to conclude that Netflix shows little to no impact in terms of subscribers and trends following the launch of Disney+. The stock analyst used Google search data and Sensor Tower application for the analysis. Sensor Tower is a leading name in research firms that provide an insight into the mobile download data.

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Share prices for Netflix gained before the market open on Tuesday but the stock was reported trading 0.6% lower later in the day. The Swiss investment bank has expressed its confidence in Netflix stock and has recommended going long with $440 target in sight.

While Wall Street had forecasted little to no change in Netflix subscribers following the release of Disney+, investors, on the other hand, remained skeptical fueling a 15% drop in Netflix share prices in the past six months. According to the analysts, Netflix is facing strong competition from other services like Amazon Prime Video, Disney+, Apple TV+, HBO Max, etc., however, it continues to lead the league of streaming platforms to date.

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The Long-Term Picture Could Be Different

Mitchelson, however, also added that it may be too soon to quantify the impact of Disney+ on Netflix in the long run. The current data must only be seen as valid for the present time and is by no means a hint at what the streaming war has up its sleeve in the time to come.

Netflix started the year at $267.66 in the stock market. Printing a yearly high of $385 in May, the stock lost significantly and was reported trading at around $259 in September. Through October and November so far, however, the stock remained upbeat and broke above $300 mark again. Netflix is currently trading $303.45.