Wednesday, 9 August 2017

DIS, NFLX - begun the streaming war has

Disney earnings were fine, but the withdrawal of movies from Netflix, is effectively a declaration of war against what will now be its prime rival. DIS and NFLX settled lower by a significant -3.9% and -1.4% respectively. Despite settling reversal candles, near term outlook offers further weakness.

DIS daily

NFLX daily


*Withdrawal of the DIS movies from NFLX is scheduled for 2019. No doubt, a number of TV shows (such as Defenders) will also be eventually pulled.

DIS: EPS of $1.58, with rev' $14.24bn, the latter being a marginal miss under consensus. Regardless, the company is doing very well. It remains somewhat odd how the mainstream are overly focused on ESPN, which is a decreasingly important part of its business.

Today's early low of $100.50 was the lowest level since Dec'6th 2016. The break under the 50/200dma's is a serious matter - at least in the short term.Things would turn bearish for the mid term with a monthly close <$99, and to be clear.. that seems unlikely.

NFLX: clearly spooked by the news that DIS is going to start breaking away from its previously 'cosy relationship'. The daily settling candle is a reversal, but further weakness to the 50dma - currently $165, seems extremely likely.

For the record, I really like both companies for the long term. Of the two, I favour DIS, not least due to the valuation (forward PE 15/16s), and a yield of around 1.5%.


Indeed, begun war has, between two corporate giants.

ps. .. and no, I'm not suggesting Iger is Palpatine. :)