Competition between streaming services is increasing, and two of the biggest names are Netflix and Disney. Both companies have very different strategies and face unique challenges. Disney recently revived Bob Iger as CEO, announced a $5.5 billion cost-saving plan, and is dealing with continuing issues with Florida Governor Ron DeSantis. Netflix, on the other hand, is pushing back against password-sharing and is boosting its ad-supported service in an effort to bring down costs and increase revenue.
Analysts seem to favor Disney compared to Netflix, with 80% of industry analysts having a “buy” rating for the stock of Disney, compared to 50% for Netflix. With that said, their potential upside estimates differ drastically: analysts expect 26% potential upside for Disney and only 3.8% for Netflix.
Bank of America and Wells Fargo are bullish on Netflix; both name it one of the top second-quarter picks and are confident in the ability of its new measures to bring in more subscribers. Additionally, Atlantic Equities analyst Hamilton Faber is keeping his “overweight” call with Netflix and estimates it will have 5% higher earnings and revenues this year.
At the same time, Barton Crockett, managing director and senior analyst at Rosenblatt Securities, believes Disney will perform better in the long run. Disney boasts a more diverse business model with a robust theme parks sector and stronger ability to clamp down on password-sharing, as well as its push to increase ad-supported streaming. Macquarie also reiterated its confidence in Disney stating it can improve profitability through staff layoffs and smarter decision-making around content spending.
Bob Iger is the former CEO of Disney and is most recently known for reviving the role in 2020, after stepping down from the position in 2019. Under Iger, Disney acquired 21st Century Fox for $71.3 billion, launched the streaming service Disney+, and scored billion-dollar box office hits like Avengers, Black Panther, and Frozen.
Disney is a multinational mass media and entertainment company based in Burbank, California. Its business segment covers entertainment, parks, experiences & products, studio entertainment and direct-to-consumer & international. Some of its major subsidiaries include The Walt Disney Company, Disney Digital Network, ESPN, Lucasfilm Ltd., and Marvel Entertainment.
The article Netflix vs. Disney? Analysts have a favorite, and give it nearly 30% upside strives to explain the difference between the two large streaming companies and the opinions of analysts. While many analysts have buy ratings for both stocks, their potential upside estimates of Netflix and Disney differ significantly. Bank of America and Wells Fargo have confidence in Netflix’s ability to bring in more subscribers while Barton Crockett believes Disney’s more diversified business lines will make them better placed to succeed in the long run. Disney also recently brought back Bob Iger as CEO and Amazon is a multinational mass media and entertainment company. With their many subsidiaries and massive range of business segments, it will be interesting to see which of these two companies can come out on top.
