The TV industry could well be a house of cards waiting to collapse thanks to Netflix.
That’s according an 80-page note sent out by BNP Paribas this morning.
“Why are we writing about Netflix?” the French broker said.
“It was mentioned in almost all of the 250 meetings we held with investors in the past six months.
“Yet, it was barely discussed by broadcasters in recent earnings releases.”
The French broker believes the likes of Sky (LON:SKY) and ITV (LON:ITV) and other players across Europe underestimate the popular online TV and movie streaming service.
“First, Netflix’s disruptive nature is being overlooked by many players,” said BNP Paribas analyst Charles Bedouelle.
“Second, the incumbents think that specific characteristics of their local markets will afford them protection – despite the numerous examples of online business models unleashing disruptions on a global scale, just think Google Apple Facebook Amazon.”
“Nobody is safe. Business mix and strategy in digital and content will be crucial to the long-term survival of European TV companies.”
He claims Germany’s ProSieben looks best-placed to withstand the shock; the Spanish and Italian broadcasters look the least prepared.
Away from TV, Deutsche Bank lowered its price targets on supermarkets Tesco (LON:TSCO) and Morrisons (LON:MRW) this morning.
“We’ve seen no improvement in UK grocery market growth since the tentative rebound experienced December and January faded,” said Deutsche Bank’s Niamh McSherry in a note this morning.
The broker still maintains a ‘buy’ on Tesco and ‘hold’ ratings at Sainsbury's and Morrisons.
Numis has broken with its normal guidelines to stick a ‘sell’ recommendation on betting exchange Betfair (LON:BET).
Sell recommendations are normally reserved for companies where we see fundamental problems, said the broker, and while Betfair is not one of those, it “cannot make sense” of a share price of more than its new target of 2,100p (up from 1,620p) or 21% below the current market price.
Thursday’s final numbers from Pets at Home (LON:PETS) obviously pleased Nomura.
The firm has upped its 12 months price target on shares in the pet care company by 50p to 295p.
Citi lifted its earnings forecasts for Wizz Air (LON:WIZZ) following recent figures from the Hungarian low-cost airline.
Yesterday the carrier announced a 20% rise in passengers for last month, compared to May last year.
Citi reckons the shares are worth £18.30.
Westhouse stuck a sell rating on publisher Pearson (LON:PSON), saying its preferred plays within the B2B Media space are UBM, DMGT, Informa and Centaur Media.
Halfords (LON:HFD) is still rated as a ‘hold’ by Cantor Fitzgerald despite this morning’s news of full-year revenues in excess of £1bn.
Strong sales in both its car and cycle businesses helped out, triggering a 2% rise in its share price in early trading to 489p.
Among the small caps, Northland nudged up its target price of DiamondCorp (LON:DCP) as the miner replaced its proposed royalty financing package with Acrux Resources by a straightforward call on shareholders.
SP Angel added that while the royalty would have been non-dilutive, the right to repurchase the arrangement after 8 years would have been subject to a valuation at that time and this uncertainty has now been removed.