Netflix Inc. has solidified its position as a fundamental component of the media industry, often being perceived as an indispensable service, according to analysts at Bernstein. However, this accolade does not necessarily guarantee its stock as a surefire winner.
Laurent Yoon and Mark Shmulik from Bernstein recently commenced coverage of Netflix shares with a market-perform rating. They likened the stock to a successful television show that has been on the air for numerous seasons, causing viewers to question whether they should continue watching or explore other options.
The analysts acknowledge the challenge faced by Netflix in maintaining growth, particularly amidst categorization as a utility. Yoon and Shmulik highlight that although opportunities for growth do exist, expectations may be exceeding reality.
While Netflix undoubtedly reigns supreme in the streaming industry, Bernstein holds a more favorable outlook on some traditional media players. They have initiated coverage of Walt Disney Co. and Warner Bros Discovery Inc. with outperform ratings. Meanwhile, Yoon expresses an underperform stance on Paramount Global’s stock and assigns a market-perform rating to shares of Fox Corp.
As the media landscape continues to evolve, Netflix faces both opportunities and challenges. While it remains a leading streamer, its future success may depend on its ability to adapt to changing viewer preferences and continue delivering compelling content.
