Hannover House Inc (HHSE)

[Anvil]

This could force Netflix to replace that programming vacuum with pricey content. The Los Gatos, Calif.-based company spent $12.04 billion on content last year, up 35% from $8.9 billion in 2017, according to its fourth-quarter 2018 earnings report. In 2019, Wall Street analysts expect that figure to climb to $15 billion. Cowen analyst John Blackledge says a 52% increase in original programming year-over-year will serve as a “tailwind” for solid Q2 results. (He maintains an Outperform rating and price target of $455.)

“The loss of ‘Friends’ and ‘The Office’ is not all bad as the company can redeploy spending on originals, potentially slowing budget growth,” Bank of America Merrill Lynch analyst Nat Schindler said in a July 12 note, in which he maintained a Buy rating and price target of $450.

Nonetheless, analysts such as Guggenheim’s Michael Morris remain sold on Netflix’s earnings’ trajectory.

“Though larger competitors are aiming to aggregate in-house programming, we believe globally-scaled new, exclusive content differentiates Netflix from entertainment alternatives including legacy (i.e., Turner, Warner, and Disney) and early-stage (PlutoTV and Apple TV+) competitors leveraging library content,” Morris said in a July 8 note, maintaining a Buy rating and price target of $420.