Is it time to press play on Netflix?
With two-thirds of main Wall Street analysts in the bullish camp, in accordance with FactSet, expectations are excessive ahead of the streaming big’s third-quarter earnings report.
Netflix shares have climbed simply greater than 64% this 12 months as stay-at-home orders propelled the firm’s subscriber progress amid the coronavirus pandemic. The inventory has struggled to push increased in latest months, nonetheless, down about 3% since mid-July.
“On a technical basis, the stock is trying or it’s moving up towards this $550 level, which has been unbelievably important resistance all summer long and now into the fall,” Matt Maley, chief market strategist at Miller Tabak, advised CNBC’s “Trading Nation” on Tuesday.
Netflix’s inventory was virtually flat Tuesday heading into the outcomes, buying and selling up lower than half of 1% at round $531 a share.
“If it can finally break above that 550 level in any kind of meaningful way, it’s going to be very, very bullish,” Maley stated, pointing to a chart of the inventory.
For Maley, Netflix’s breakout potential hinges on how lengthy the stay-at-home story lasts, significantly with coronavirus case counts ticking up in sure nations.
“If it fails and it rolls back over and breaks below the 510 level — that’s its trend line going back to March — it probably means it’s going to go down and test the summer lows down in the mid-400s,” he stated. “I’m looking at 550 to the upside, 510 to the downside. Whichever way that is broken will lead to a very big move in Netflix. So, still look for a lot out of this stock before the year is out.”
Mark Tepper, president and CEO of Strategic Wealth Partners, stated that with winter quick approaching and new coronavirus flare-ups, streaming ought to proceed to carry robust.
“Whenever Netflix had a bad quarter in the past, it was because of churn. But in my opinion, nobody’s really canceling their Netflix subscriptions right now,” Tepper stated in the identical “Trading Nation” interview.
Beyond that, Netflix’s steering for internet paid subscriber additions was “very conservative,” Tepper stated, including that he anticipated the firm so as to add some Three million internet paid subscribers versus its 2.5 million estimate.
“Look, movie theaters are dying. Who knows if they’ll even be a thing in five years? I think you’re going to see more and more of these movies go straight to streaming,” Tepper stated.
“Last thing I want to say is Netflix’s pricing power is getting stronger,” he stated Tuesday. “Cowen actually runs a proprietary survey and the percentage of respondents who said they would pay more for a subscription has gone from 48, I believe, percent at the end of last year up to 53% today. That’s very strong and that’s good for the stock.”
Disclosure: Strategic Wealth Partners owns shares of Netflix.