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Netflix, Inc. (NFLX) Stock Surge On Disney Deal; Could Hit $200

Netflix Inc (NASDAQ:NFLX)

Investors seem to be happy with an announcement that Netflix, Inc.  will start streaming all films and television series from Walt Disney Co (NYSE:DIS) from this September. Shares of the company’s stock were trading up over 4.00% as of 12:46 PM EST.

Netflix Inc (NASDAQ:NFLX)

Netflix Becoming Exclusive Pay TV Home

Netflix signed an exclusive licensing agreement with Walt Disney in 2012. On Monday, the online video streaming announced that it will start streaming the Disney films in September, which means the deal is taking effect in September. The agreement, which includes the latest films and shows from Marvel, Lucasfilm and Pixar, will make Netflix the exclusive U.S. pay TV home of the Disney.

“From September onwards, Netflix will become the exclusive US pay TV home of the latest films from Disney, Marvel, Lucasfilm and Pixar,” the company said a statement.

The online streaming company will stream Jurassic Park and Spotlight in June, and The Big Short and Back to the Future in July. The company will gain The Fast & The Furious and The Wedding Planner in August.

“We’re excited to be bringing you new and exclusive Netflix Original movies including Mascots from the master of low-key comedy Christopher Guest (Waiting for Guffman, Best in Show, A Mighty Wind) and War Machine, from acclaimed Australian director David Michod and starring Brad Pitt, in the serio-comic tale of the U.S. military adventure in Afghanistan,” according to Netflix.

The deal, which will reportedly cost the steaming service $300 million per year, is part of Netflix’s efforts to become exclusive and original content provider. As a result of this deal, paid TV networks such as HBO and Starz will not be able to get their hands on other Disney productions as well, The Markets Daily reported.

This deal is very important to Netflix, Inc. , as the company is facing growing competition from Amazon Prime video streaming service. To enjoy Disney’s movies, viewers will have to buy Netflix subscriptions, and they would not turn to Prime, Hulu, and other services.

Positive News For Netflix Stock

On Monday, the online video streaming service’s shares rose 2.59%. The stock is currently up 3.92%, to a monthly high of $98.61, which shows that the Disney announcement has a positive impact on the stock.

Analysts are very optimistic about the company. RBC Capital Markets believes that the online video streaming company’s global subscriptions could grow from 81.5 million to 180 million by 2020. Mahaney, in a note to investors, mentioned that he forecast that the stock could rise as much as $200 within four years.

Piper Jaffray also issued positive comments about the company’s global expansion opportunities, according to Investor Place. By 2020, Analyst Michael Olson believes Netflix, Inc.  could hit around 141 million subscribers worldwide of which 63.2 from the United States and 77.3 million overseas. The online video streaming service currently has nearly 35 million subscribers outside the United States, about 5% of the total market of broadband households. It holds a 45% share of the U.S. market.

Earlier, we reported that investors shouldn’t be concern about Netflix’s high valuation.

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