Disney's New Streaming Service Knocks Netflix Stock

Disney priced its service below Netflix

Deputy Editor
Apr 12, 2019 at 10:04 AM
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Streaming giant Netflix, Inc. (NASDAQ:NFLX) is getting ready to face some major competition. Entertainment heavyweight Walt Disney (DIS) will enter the on-demand video arena with its new Disney+ service in mid-November. Disney said its family-friendly streaming service will be priced below Netflix's current rates, and it has already received glowing predictions from a slew of analysts. As a result, Netflix is down 3.4% at $355.17 today. 

NFLX stock has recovered from its Dec 26 annual low of $231.23, but recently stalled out in the $380 region -- an area that has stifled the equity's rally attempts since last August. What's more, today's drop has the security set to close below its 50-day moving average for the first time since early January. 

The majority of the brokerage bunch have remained optimistic on the streaming stock, with nearly 75% of analysts giving NFLX a "buy" or better rating, and only one saying it's a "strong sell." The consensus 12-month price target of $381.79, however, is a mere 7.5% premium to current levels. 

Optimism abounds in the options pits, too. In the last 10 days, 1.74 calls have been bought to open for every put on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 90th percentile of its annual range, hinting at a much healthier-than-usual appetite for bullish bets over bearish of late. 

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