The Netflix bulls are at it again, with another firm adding to a new pile of price target increases. A few months ago analysts were at war to see who could set their target the highest, and now it looks like another battle is brewing.

Netflix price target to $140

RBC Capital Markets analyst Mark Mahaney and his team have maintained their Outperform rating on Netflix but increased their price target from $125 to $140 per share. Their price target increase comes following a 20% correction in Netflix’s share price, but they still see the stock as one of their top internet longs because positive survey results in the U.S., the U.K. and Brazil.

This week the RBC team released the results of their latest survey of internet users.

U.S. consumers see value in Netflix

In the U.S., they surveyed more than 1,000 internet users. They learned that 49% use Netflix to watch movies and TV shows. That’s a very slight decline from the 50% they measured in May, but it is also the second highest level ever.

1

Only YouTube was higher at 50%, and in third place was Amazon, way down at 25%.

23

The RBC team also reports that 68% of U.S. subscribers are either “extremely” or “very” satisfied with Netflix. That’s also a slight decline from May but again the second highest level since they’ve been doing the surveys in each of the last 16 quarters.

4

They also found churn rates close to record lows at only 5% of subscribers being “extremely” or “very” likely to cancel their Netflix subscriptions. Again this was a big positive for Netflix, as this was the second lowest level they’ve ever recorded.

5

Further, they learned that the recently announced $1 price increase doesn’t appear to be impacting subscribers’ decisions about whether to keep Netflix or not.

7

The RBC team also learned that 32% of Netflix subscribers in the U.S. think the available content has “greatly or moderately improved’ over the last year, which they said was also the highest level they’ve ever seen.

6

Interestingly, 60% of Netflix subscribers in the U.S. saw the original content as “extremely important” in their decision to stay a subscriber. However, 52% said original content had nothing to do with why they signed up for Netflix in the first time. About 25% did say the original content was a material factor in deciding whether to sign up or not though.

89

Netflix gains traction in the U.K.

In their sixth U.K. survey covering 1,500 internet users there, they learned that usage of Netflix has climbed dramatically with about 30% of U.K. participants using Netflix to watch movies and TV shows. That’s an increase from the 25% they found in September 2014 and 14% in August 2013.

10

Just 12% of U.K. internet users were using Amazon/ LOVEFiLM. They also noticed that for the first time, Netflix beat Amazon Instant Video in terms of which service U.K. users preferred more.

11

Also satisfaction levels in the U.K. hit a new record high at 76% of subscribers either “extremely” or “very” satisfied with Netflix’s service.

12

Additionally, they found churn rates at a record low level of about 26% of U.K. subscribers being “extremely” or “very” likely to cancel. That was the lowest level they have recorded so far and a decline from the 31% recorded in September 2014.

13

Netflix gaining momentum in Brazil

For the first time, the RBC Capital team surveyed Brazilian internet users, covering 1,500 consumers. They learned that about 60% of respondents use Netflix to watch movies and TV shows. That’s less than YouTube at 81%, but higher than Globo at 50% and SBT at 40%.

14

They also found extremely high satisfaction levels with 94% of Brazilian subscribers being either “extremely” or “very” satisfied with Netflix.

16

Churn rates were similar to those in the U.K., with about 26% of subscribers in Brazil being “extremely” or “very” likely to cancel their service. Seventy-one percent were “not at all” or “slightly” likely to cancel.

17

Interestingly, more users in Brazil are satisfied with Netflix than those in the U.S.

15

International penetration rate looks high

Also the RBC team thinks Netflix’s international penetration could be closer to 30% rather than their previous estimate of about 20%. This means the video streaming provider could find itself with 140 million international subscribers and 200 million global subscribers one day, which would be triple the number of subscribers it currently has.

At a 30% operating margin and average revenue per user, they see more than $10 per share in earnings potential, which suggests “material” upside for Netflix shares in the long term.

All charts/ graphs in this article are courtesy RBC Capital Markets.