Bernie McTernan of Rosenblatt Securities On Netflix and Disney

In a recent CNBC interview Bernie McTernan of Rosenblatt Securities gave Netflix a ‘hold’ rating and a price target of $425.

“In this survey, 32% of the respondents indicates their plan of cancelling their subscription. That’s up from about 13% prior 4 surveys and it makes a lot of sense given of what’s happening on their service right now. And we have ‘The Office’ moving to Peacock, and then also the price increase coming up. Don’t forget too that a lot of viewers are stock at home for about 9 months so in a ‘post pandemic’ world, they would want to get out and do more things. 65% of the respondents say that they want to be subscribed to less streaming services post pandemic, than they do now.

…On future price increases, 15% of Netflix respondents said they wouldn’t cancel if the price went over $20 a month, only 6% said that for Disney. What it tells you is that, 6% of the people are willing to pay $20 or more and that’s at this point too. One of the most interesting thing that came out of Disney Investor Day is really the content overload that’s about to happen at DisneyPlus and the key thing is they were able to get massive subscriber scale in their first year of  service using library content. In the second half of this year the Marvel Original content and more movies will be hitting the service and we think that’s going to drive ultimately a lot more pricing power (compared to Netflix).”