Shares of Netflix May Benefit from the Coronavirus

Amid the negative effects caused by the outbreak of the new coronavirus in several markets, Netflix’s actions follow the opposite direction.

Even with the bad scenario, the company seems to be immune to the big declines that other stocks are suffering so far, because investors think that an outbreak could cause people to spend more time at home and watch the streaming service.

With a growth of more than 15% this year, the streaming provider’s shares had one of the best performances in the S&P 500 in the last week, even with the index falling.

Comprised of several assets listed on the NYSE and NASDAQ stock exchanges, the S&P 500 experienced one of its worst weeks since the financial crisis of 2008, after the World Health Organization (WHO) raised the level of spread of the new coronavirus to “very high” all around the world.

The expectation of an increase in people in the home office or home isolation, may also benefit other entertainment services, such as Facebook, Disney and Amazon.

Analysts at Moody’s Investors Services, led by Neil Begley, in a January report, when the coronavirus outbreak was still concentrated in China, already pointed to the movement.

“If contagion becomes more widespread internationally, but with little panic, more people are likely to look for home entertainment options like companies like Comcast and AT&T, as well as Netflix TV shows and movies, Disney Plus, Comcast’s Peacock , HBO Max from AT&T and AT&T itself ”.

“The market likes Netflix on the premise that quarantine has a high value,” said Bill Smead, chief investment officer at Smead Capital Management, in a report

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Shares of Netflix May Benefit from the Coronavirus - /10

Summary

Comprised of several assets listed on the NYSE and NASDAQ stock exchanges, the S&P 500 experienced one of its worst weeks since the financial crisis of 2008, after the World Health Organization (WHO) raised the level of spread of the new coronavirus to “very high” all around the world.

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