Imperial Capital analysts said Thursday they are cutting their stock price target on Netflix Inc.
to $451 from $458 after media reports that the company was unable to strike a wide-release theatrical agreement for its coming film “The Irishman,” the Martin Scorsese drama starring Robert De Niro and Al Pacino. “Even by Netflix standards, the film is extraordinarily expensive, costing as much as $200 million in total production expense,” analyst David Miller wrote in a note to clients. Much of that cost is due to the use of “de-aging” special effects that will allow the actors to appear to be at different stages of their lives as the film moves back and forth through time. Miller is expecting it to be the most expensive film that Netflix has made so far. The streaming giant held talks with Cinemark Holdings Inc.
and AMC Entertainment Holding Inc.
on a theatrical release, which now apparently will start Nov. 1 at select cinemas in New York and L.A. owned by the Landmark and Alamo Drafthouse chains only. The film will debut at the New York film festival on September 27. Scorsese was reportedly in talks on getting a wider release for the film, but talks have now broken down, according to media reports. The news sent Netflix shares lower Wednesday, along with Cinemark and AMC. The cinema chains want Netflix to respect the traditional theatrical window, under which studios release films for at least 90 days in cinemas before moving to streaming and other platforms. But Netflix wants to make its films exclusively available on its service, to ensure subscribers stick with it. Film makers generally favor the theatrical release too, setting up a clash with Netflix, which is also keen to start winning Oscars. Miller said he is sticking with his outperform rating on the stock, the equivalent of buy. Netflix shares were up 2.5% Thursday and have gained 12% in 2019, while the S&P 500
has gained 16%. Cinemark was up 1.9% and AMC was up 2%.
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