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The Zacks Analyst Blog Highlights: Apple, Netflix, AT&T, Disney and Amazon

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For Immediate Release

Chicago, IL –December 11, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Apple (AAPL - Free Report) , Netflix (NFLX - Free Report) , AT&T (T - Free Report) , Disney (DIS - Free Report) and Amazon (AMZN - Free Report) .

Here are highlights from Tuesday’s Analyst Blog:

Golden Globe Nominations: Who Gets the Biggest Boosts?

Apple’s The Morning Show, which debuted on the Apple TV+ streaming platform on Nov 1, received multiple Golden Globe award nominations from the Hollywood Foreign Press Association (HFPA).

HFPA nominated The Morning Show for the Best TV Series – Drama. The show’s stars, Jennifer Aniston and Reese Witherspoon, each was nominated for Best Performance by an Actress in a Television Series.

The nominations for The Morning Show have been quite a surprise, as the show received weak reviews from critics. However, per The New York Times, the show has a 94% approval rating among Rotten Tomatoes users, which is impressive.

Moreover, the nominations, first-ever received by a streaming platform in its launch year, is a huge confidence booster for Apple TV+ in the streaming space, currently dominated by Netflix.

Netflix Dominates Golden Globe, Outpaces Sony & HBO

Netflix, for the first time in its history, received Golden Globe nominations for Best Motion Picture – Drama for three of its movies — Marriage Story,The Irishman and The Two Popes.

While Noah Baumbach-directed Marriage Story got six nominations and topped the film categories, Martin Scorsese’s directorial The Irishman received five.

Overall, Netflix received 34 nominations, which include 17 in television, outpacing AT&T owned HBO’s 15 nominations.

Meanwhile, per The New York Times, Sony Pictures, a division of Sony, was the most successful traditional entertainment company in this year’s Golden Globe. The company grabbed 10 film nominations, including five for Once Upon A Time In Hollywood.

Intensifying Competition to Hurt Netflix’s Prospects

Notably, Netflix’s shares have returned 13% year to date, underperforming the S&P 500’s rally of 24.3%, primarily reflecting slowing prospects amid rising competition in the streaming space from the likes of Apple TV+ and Disney’s streaming platform, Disney+.

Year-to-Date Performance

Other notable upcoming services include NBCUniversal’s Peacock and HBO max. Furthermore, Amazon has been taking initiatives to fortify presence in the streaming space through its prime video service.

Netflix plans to counter rising competition on the back of robust content portfolio and binge viewing. The streaming giant is estimated to spend $15 billion this year on content compared with $12 billion in 2018.

However, increasing spending is expected to negatively impact free cash flows. Netflix expects to spend $3.5 billion in cash on operations and investments in 2019.

Moreover, cut-throat price competition is expected to be detrimental to Netflix. Notably, the streaming giant has a content obligation of almost $19 billion in its balance sheet.

Apple’s Content Strength, Pricing Pose Challenges for Netflix

Meanwhile, the Golden Globe nominations reflect Apple TV+’s content strength. The streaming platform’s strategy to tie-up with top-tier talent to create exclusive content is a key catalyst.

Notably, Steven Spielberg, J.J. Abrams, Oprah Winfrey, Jennifer Aniston, Steve Carell, Chris Evans and Octavia Spencer, among others, are working with Apple.

The company recently premiered Servant, its latest original series, which is a new thriller from the acclaimed director M. Night Shyamalan. This followed the premiere of Truth Be Told, a limited series from Aaron Paul and Octavia Spencer about America's obsession with true crime, which was launched on Dec 6.

Moreover, Little America (inspired by true stories from Epic Magazine) and Hala (a movie about a Muslim teenager struggling with her identity) are other notable contents, which will be available soon.

Further, Apple’s competitive pricing of $4.99 per month and focus on expanding its original content portfolio, as indicated by the recent pick-up in hiring, are major growth drivers. We believe its expanding content portfolio is likely to expand the subscriber base in the near term.

According to a CNBC report, Apple TV+ is expected to become a $9-billion-per-year business with 136 million paid subscribers by 2025, assuming that one in every 10 Apple users will pay for the service, as estimated by Morgan Stanley analyst Katy Huberty.

Zacks Rank

Apple, Amazon, AT&T, Disney and Netflix currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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