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PLAYING THIS WEEKEND: Among this weekend’s highly-anticipated new streaming content is the first few episodes of “Andor,” a drama series set in the “Star Wars” universe, on Disney+ (DIS). Meanwhile, Netflix (NFLX) subscribers can catch the fifth season of drama series “You,” as well as neo-noir action thriller film “Havoc,” starring Tom Hardy and Forest Whitaker. Additionally, Amazon Prime Video (AMZN) users can check out new comedy-drama series “Etoile,” which is created by Amy Sherman-Palladino and Daniel Palladino, who also made “Gilmore Girls” and “The Marvelous Mrs. Maisel.”
NETFLIX RESULTS: Last week, Netflix reported better-than-expected Q1 results, with revenue and operating income rising 13% and 27% year-over-year, respectively. Looking ahead, the company provided for Q2 earnings per share and revenue above consensus estimates, and reiterated its FY25 revenue outlook, adding that it will roughly double advertising revenue in 2025.
Following the report, at least 16 different securities analysts raised their price targets on Netflix shares, Barclays said the stock has come to be seen as a “defensive long” in the current macro backdrop and its Q1 results and Q2 guidance “are likely to reinforce this thesis further.” The firm added that while the company’s revenue was roughly in line with consensus, margin for the quarter and margin guidance for Q2 were both better than estimates. Meanwhile, Morgan Stanley also raised its price target on Netflix, saying the business is “predictable” and that predictability, combined with a business that should be relatively resilient in a tougher macro, support an Overweight view.
Additionally, Phillip Securities upgraded Netflix to Neutral from Reduce with a price target of $950, up from $870, post the Q1 report. A “strong” content pipeline and the expansion of its advertising supported tier position will enable Netflix to navigate potential economic slowdowns, the analyst told investors in a research note. The firm believes the stock’s current valuation suggests limited near-term upside, but cites Netflix’s ability to withstand a recession for the upgrade.
COMCAST RESULTS: This week, Comcast (CMCSA) reported upbeat Q1 earnings and revenue, with Peacock revenue increasing 16% to $1.2B. “We had strong financial results in the first quarter, growing Adjusted EPS mid-single digits and generating $5.4 billion of free cash flow while investing in our six growth businesses and returning $3.2 billion to shareholders,” said Brian Roberts, chairman and CEO of Comcast Corporation. “Our connectivity businesses generated 4% revenue growth, fueling expansion in C&P EBITDA margins to 41.4%. We also achieved our highest wireless line additions in two years and have outperformed in Business Services with mid-single digit revenue and EBITDA growth and margins of roughly 57%. At the same time, momentum in streaming continues with 21% growth in Media EBITDA; and Theme Parks remain on an incredible growth trajectory. We could not be more excited for the grand opening of Epic Universe in Orlando next month and our plans to bring a new world-class theme park to the UK. With our significant free cash flow generation, disciplined approach to capital allocation and the strength of our diversified businesses, I am confident that we are well-positioned to navigate an evolving environment and capture future opportunities.”
Following the report, no fewer than five analysts lowered their price targets on Comcast, with Morgan Stanley saying that Comcast believes it has the products to win in the market, but “it is not winning today.” Meanwhile, Oppenheimer thinks Comcast has a pricing problem and sees a difficult path for the company to continue growing cable revenue and margins. Competition is ramping while the economy appears to be slowing-consumers will look to save money, the firm added.
MAX: Warner Bros. Discovery’s (WBD) Max announced new U.S. product updates with the introduction of the Extra Member Add-On feature, designed to give existing subscribers “greater flexibility and control over how they manage sharing their Max accounts.” This new feature also includes the capability to transfer an adult profile to the extra member account, Max said. “Extra Member Add-On and Profile Transfer are two key Max advancements, designed to help viewers with a new way to enjoy our best-in-class content at an exceptional value, and offer subscribers greater flexibility in managing their accounts,” said JB Perrette, CEO and President, Global Streaming and Games, Warner Bros Discovery. “These updates provide a simple way for subscribers to add-on a new member to their account, or for existing subscribers who have users outside of their household to smoothly, and in an uninterrupted fashion, transition their profile so that extra member can continue to access Max.” The Extra Member Add-On allows a primary account owner to share their Max account by inviting a friend or family member outside of their household to create a separate, standalone account with an adult profile under the same subscription. These Extra Members will have their own login credentials separate from the primary account. Extra members can stream from one profile on one device at a time and can enjoy all other benefits included in the primary account owner’s base plan. Extra Member Add-On is limited to one add-on per account. This feature costs $7.99/month. The price is the same regardless of which tier an eligible user is subscribed to.
Meanwhile, the Wall Street Journal reported that Warner Bros. Discovery revamped Max after acknowledging it wasn’t a “must-have” service. Max shed kids’ content and unscripted shows, focusing on differentiated adult-oriented and true-crime programming. A bundling partnership with Disney drove subscriber growth, with potential for overseas expansion, the report notes. Max added 20M subscribers in 2024 to finish the year at 117M globally, and expects to hit 150M in 2026, the report notes.
PARAMOUNT/FCC: Paramount (PARA) is in talks with the FCC over the initial steps the company would need to secure the agency’s approval of its merger with Skydance Media, The Wall Street Journal’s Jessica Toonkel, Josh Dawsey, and Drew FitzGerald reported this week. One action under discussion between the agency and Paramount is a commitment that the company continues to abstain from certain corporate diversity initiatives, people close to the discussions say. FCC Chairman Brendan Carr has said that a third-party news-distortion complaint related to the way “60 Minutes” edited a Kamala Harris interview last year could factor into his agency’s review of Paramount’s deal.
DISNEY/FUBO: Justice Department antitrust officials are looking into Disney’s deal to take a controlling stake in FuboTV (FUBO), Leah Nylen and Josh Sisco of Bloomberg reported, citing people familiar with the plans. The officials are scrutinizing whether the deal would unduly concentrate the market for sports streaming, sources told Bloomberg. Disney in January agreed to merge its Hulu + Live TV streaming service with FuboTV.
STOCK PLAYS: Other publicly traded companies in the space include Apple (AAPL), AMC Networks (AMCX), Roku(ROKU), and Fox(FOX).
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