Netflix, Inc. Up On Positive Analysts Reports Ahead Of Earnings

Netflix, Inc. Up On Positive Analysts Reports Ahead Of Earnings
NFLX Photo by Matt Perreault

Netflix is scheduled to release its earnings report for the first quarter on Monday after the market closes. Before that, several analysts have given positive reports on the Internet TV service that pushed its stock up on Wednesday.

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Analysts bullish on Netflix

Yesterday Richard Greenfield with BTIG reiterated his Buy rating on Netflix and raised his 12-month price target from $136 to $150. Greenfield also raised his subscriber growth forecasts and lowered his expectations for international losses.

“We believe the cadence and consumer appeal of Netflix’s original/licensed content is leading to greater than expected global net subscriber additions,” the analyst stated.

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Greenfield added that Netflix’s gross subscriber additions will get a boost because of three main reasons: the global shift to on-demand streaming video, an increasingly diverse slate of programming appealing to all members of a household and best-in-class technology. These factors also contribute in reducing churn.

By the end of 2018 and 2020, Netflix will have 127 million and 150 million global subscribers respectively, forecasts Greenfield. Netflix’s expansion into China is not included in the forecasts. The SVOD company had 74.76 million subscribers worldwide at the end of 2015.

On Wednesday, Netflix’s stock jumped by as much as 4% but ended the day with a gain of over 2% at $109.65. The stock has risen by more than 35% since early February, while year to date, the stock is down by over 6%.

Netflix ahead of rivals

On Tuesday, Piper Jaffray analyst Michael Olson reiterated his Overweight rating on Netflix with a price target of $122. Olson, in a spring survey of U.S. teenagers, found that the streaming firm holds a massive lead in video services among young consumers. Netflix’s usage among teens is 64%, which is well ahead of competing services from Amazon and Hulu with 4% and 3% usage, respectively.

On Monday, Morgan Stanley released survey results in which consumers gave top rank to Netflix for original programming and put it ahead of Time Warner-owned HBO. Morgan Stanley has been tracking consumer preferences in video services for six years, but for the first time, Netflix is ahead of HBO.

Netflix offers the best original programs, according to 29% of survey respondents (up from 23% last year), while HBO secured the second spot with 18% in its favor — a huge decline from 31% last year, said Morgan Stanley. Amazon, Hulu and CBS-owned Showtime all secured 5%.

However, all are not bullish on the streaming firm. On Wednesday, Wedbush analyst Michael Pachter maintained his Underperform rating on the streaming firm’s stock. Dougherty analyst Steven Frankel believes Netflix’s “path to respectable profitability remains difficult to determine.”

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at
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