Look For Netflix Churn To Diminish, M&A Speculation To Continue

Traditional TV is feeling the heat, and Netflix, Inc. NFLX 0.36% remains in perfect position to capitalize. According to Drexel Hamilton analyst Tony Wible, Netflix shareholders will also likely benefit from a flood of M&A activity in the TV space.

“We see unsustainable pressure in the traditional TV ecosystem that will lead more MVPDs and VMVPDs to integrate more online networks into their traditional bundles,” Wible explained. “We believe this trend is underappreciated and should boost NFLX sub growth as utilization increases and churn decreases.”

Catalysts Ahead

Following the merger of AT&T Inc. T 0.81% and Time Warner Inc TWX 0.24%, should it be completed, Wible believes the pressure is increasing on other major players in the space to respond. He sees Netflix as the unparalleled leader in streaming TV and feels that potential buyers see it the same way.

Wible believes shareholders shouldn’t be concerned about net neutrality or harmful policies from the Trump administration. He believes online publishers have a powerful lobby in Washington and a strong influence over voters.

Looking ahead to Q4 earnings, Wible predicts a $0.02 EPS beat for Netflix. He is calling…

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