With Netflix’s (NFLX) earnings report coming out soon, it’s little surprise that news is also emerging. And for the most part, investors weren’t happy about what they heard. A new brand partnership plan hit Netflix investors, who sent shares of the video streamer down modestly in the closing minutes of Wednesday’s trading session.
Reports note that Netflix is courting potential brand partnership arrangements, offering a combination of partnerships and television advertising. In fact, Netflix is said to be particularly interested in offering product placement deals on its original titles. Furthermore, it’s reportedly looking to be paid for those placements, which is, apparently, not commonly done.
The problem here is that Netflix isn’t alone in the combined ad/partnership push. Amazon (AMZN) is also said to be in the hunt for similar partnerships, which will likely impact the value that such packages could produce. Either would be able to readily undercut the other and force a potential price war.
A Trump Upvote
Amazingly, Netflix seems to have gained a bit of ground recently, thanks to the Republican National Convention. Not so much because it’s prompting people to increase their Netflix viewing to get away from it, but rather because of a show therein. J.D.Vance’s “Hillbilly Elegy” is spiking in viewership as people have suddenly heard about him thanks to his new status as vice presidential candidate.
This comes at a good time for Netflix, as many customers are still stewing over the loss of Netflix’s lowest-cost tier and are taking to Reddit to voice their displeasure. With costs for just about everything still out of sight, Netflix may find some customers less interested in being customers now, and that could hurt its hopes for brand partnerships.
What Is Netflix’s Stock Prediction?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 23 Buys, 12 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 36.79% rally in its share price over the past year, the average NFLX price target of $673.89 per share implies 4.11% upside potential.
