Why Netflix Is Still The Content King

After a weaker content slate than normal for Netflix Inc (NASDAQ: NFLX), the streaming giant has an impressive lineup of original content coming in the second half of 2021 and highly anticipated show returns in 2022.

The Netflix Analyst: Credit Suisse analyst Douglas Mitchelson upgrades shares of Netflix from Neutral to Outperform and maintains a price target of $586.

The Netflix Takeaways: Netflix saw its streaming market share dip in the first quarter and fourth quarter of last year. Mitchelson expects market share to rise with the stronger content slate ahead.

The analyst sees a strong August through December content slate while also highlighting that 2022 could be even better for the company with “Stranger Things” season 5 and “Bridgerton” season 2.

“This follows a much lighter-than-normal first five months of the year, along with price increase churn and pandemic pull forward hangover as further burdens on subscriber growth,” Mitchelson wrote in the note.

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Mitchelson uses Nielsen data that shows the company having 23% market share for the U.S. streaming market along with a survey of customers to show strength for Netflix.

“Respondents highlight Netflix’s original content,," according to Mitchelson, "an area where Netflix will maintain a significant lead even as competitors ramp their efforts."

Survey responders signaled Netflix is the service they turn to more often than live TV and a first option when looking for content to watch.

A favorable risk/reward entry point for Netflix shares is seen by the analyst right now.

“If content is king in streaming, Netflix still wears the crown," Mitchelson said.

NFLX Price Action: Shares of Netflix are up 2% to $527.20 on Friday.