Great. Up $15 and I managed to get back even.
NFLX: Goldman Ups To Buy, $300 Target
By Tiernan Ray
Shares of Netflix (NFLX) are up 80 cents, or 0.4%, at $202 after Goldman Sachs analyst Ingrid Chung this morning raised her rating on the stock to Buy from Neutral, with a $300 price target, and raised her subscriber estimate for 2015 to 60 million users, up from a prior estimate of 50 million.
Chung sees Netflix benefiting from the “rapid growth of online video consumption driven by the proliferation of connected devices.” Netflix has scale to keep competitors at bay, argues Chung, given that content costs are a high barrier to entry and given that the company has set the bar low on price to the customer, at $7.99 per month for the basic streaming option.
Competitive worries that kept Chung cautious on the competition in December now seem to her less threatening, including Amazon.com (AMZN), Apple (AAPL), Google (GOOG), and the Hulu online service.
“We believe that the demand for video streaming could be big enough to sustain multiple business models and
competitors and that these models can co-exist,” writes Chung.
As for Facebook’s recent movie distribution deal with Warner Brothers, which Chung last week described as a “credible threat,” she writes this morning, “In the near-term, this offering is more of a threat to current forms of VOD, such as iTunes and Amazon.”
Chung raised her 2011 revenue estimate to $3.12 billion from a prior $3.09 billion, andised her EPS estimate, on an adjusted basis, to $4.56 per share, up from a prior $4.52 estimate. She raised estimates for 2012 and 2013 as well. |
