Netflix given Buy rating ahead of results
Following market close on Wednesday 18th Jan, Netflix (NASDAQ:NFLX) reports fourth quarter results. So far this week and just before results the stock has hit a new high, touching $135.40 on market open Tuesday. Investors are optimistic on the prospects for the stock as it has risen 35% over the past six months.
Mizuho Securities upgraded Netflix (NASDAQ: NFLX) from Neutral to Buy with a price target of $152.00, up from $112.00.
Analyst Neil Doshi has said he sees Netflix adding more subscribers than he had previously thought. He raises his net subscriber additions to 4.6million from 3.5 million stating “stronger subscriber growth potential this year.”
Total streaming subscribers reached 86.7 million in Q3 up from 69.2 million from the same quarter last year. Given the upward trajectory the company should quite easily achieve the 100million subscriber landmark. CEO Reed Hastings suggested that 100 million members could be just the beginning.
Neil Doshi believes that the United States business will experience growth following the surprising gains Netflix is making with OTT streaming services.
Doshi commented “We also believe the slew of OTT streaming services like Sling TV, DirecTV Now, etc., could benefit Netflix as people might opt for cutting the cord and would be more likely to subscribe to the Netflix service. Finally, Comcast, Charter and TiVo deals should drive more sub growth. He raised his 2018 GAAP EPS forecast to $2.05 from $1.70.
Mizuho Turns Bullish On Netflix
Mizuho Securities has upgraded Netflix to buy from neutral and raised their price target to $152 from $112.
“We believe there is material room for international subscriber growth and contribution profit growth, even without material gains in Asian markets,” Doshi wrote in a report. “Furthermore, we like the moats around original content, and as cord-cutting increases, we see Netflix as a beneficiary. We like the setup for 2017 and beyond.”