Amid fears over a global economic slowdown from the widening coronavirus outbreak, companies like Netflix that provide in-home services are best positioned to withstand the storm or even see upside from the crisis, industry analysts say.
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Netflix "is an obvious beneficiary if consumers stay home due to coronavirus concerns, and this has been reflected in considerable stock price outperformance this week," BMO Capital Market analyst Dan Salmon wrote in a research note on Friday.
Netflix shares were up 0.8 per cent for the week through market close on Thursday amid the worst sell-off on Wall Street in nearly nine years over fears that a broader spread of the coronavirus may lead to a worldwide recession.
In addition to Netflix, other tech companies catering to internet-connected consumers at home that could benefit from coronavirus include Facebook, Amazon, Peloton and Slack, according to MKM Partners analyst JC O'Hara.
"We tried to identify what products/services/companies would potentially benefit in a world of quarantined individuals," O'Hara wrote in a note on Thursday, per CNBC.
"What would people do if stuck inside all day?"
Earlier this week Perry Sook, CEO of TV giant Sinclair Broadcast Group, also put a positive spin on how coronavirus could affect his business.
Nexstar is the largest owner of broadcast TV stations in the US after acquiring Tribune Media last year, with a footprint spanning 197 stations and digital multicast networks in 115 markets.
If coronavirus cases become "more widespread in the United States, and there's more quarantine in home and all of that, then it could potentially benefit our business because we'd be the primary source of entertainment," Sook said on Nexstar's February 26 earnings call when asked about the potential financial impact of the virus.
Other analysts have identified home-entertainment providers as seeing a potential silver lining from a wider spread of the virus.
"If the contagion became more internationally widespread but short of panic, more people are likely to seek home entertainment options such as from companies like Comcast and AT&T, and streaming TV shows and films from Netflix, Disney Plus, Comcast's Peacock, AT&T's HBO Max and others," Moody's Investors Services analysts led by Neil Begley commented in a January 29 report.
Australian Associated Press
