The stock of streaming giant Netflix (NFLX) is down nearly 5% since reports surfaced that rival Paramount Skydance (PSKY) is planning a takeover bid for Warner Bros. Discovery (WBD).
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While no deal has been announced, the combination of Paramount Skydance and Warner Bros. Discovery would create a formidable challenger to Netflix in the streaming space. Paramount Skydance already owns the Paramount+ streaming service, while Warner Bros. Discovery owns streaming service HBO Max.
A combined Paramount and Warner Bros. would also own the CBS television network and a raft of specialty channels ranging from Nickelodeon to CNN. Content among the combined companies would include film and television franchises such as “Harry Potter” and “The Lord of the Rings,” as well as D.C. Comics characters such as Batman and Wonder Woman.
Live Sports
However, the biggest area where a combined Paramount Skydance and Warner Bros. Discovery could challenge Netflix is in the arena of live sports. Both Paramount and Warner Bros. have a long list of broadcast sports rights, including for NFL football and Major League Baseball games.
The two media giants also have the broadcast rights to college football and basketball games. Live sports is an area where all streaming services have been aggressively expanding, seeing it as a way to attract subscriptions. Netflix, in particular, has been focusing on live sports and events to grow its subscriptions, airing everything from NFL games to professional wrestling matches and live hot dog eating contests.
Analysts have been quick to say that a combined Paramount Skydance and Warner Bros. Discovery could present significant competition for Netflix, especially when it comes to live sports.
Is NFLX Stock a Buy?
The stock of Netflix has a consensus Moderate Buy rating among 36 Wall Street analysts. That rating is based on 24 Buy, 11 Hold, and one Sell recommendations issued in the last three months. The average NFLX price target of $1,394.50 implies 16.85% upside from current levels.
