Citi Research has upgraded Netflix to a Buy and raised its price target from $409 to $525. Pacific Crest anticipates solid 1QFY15 financial results and subscription additions for Netflix
On Friday, Citi Research raised the stock of Netflix Inc. to a Buy from neutral before its first quarter earnings report for fiscal year 2015, and increased it price target to $525 from $409.
The research firm quoted three main reasons of the upgrade. The latest share price pullback (possible due to competitors fear), which the research firm opposes as inexcusable, provides a striking opportunity for future bulls at present levels. The shareholders are paying less for global market compared to well-developed UK/Ireland and North American market. The global market signifies almost 350 million broadband opportunities for household. The content schedule is improved this year and latest released content is getting good reviews; which shows strong users growth.
Another research firm, Pacific Crest on Friday repeated its rating of Buy and $500 price target on stock of video streaming company. However, it suggested to Buy stock of Netflix Inc. because of structural advantage, it is most likely that first quarter subscription growth will be same as estimated by the company.
The sell side company projected 1st quarter subscriptions growth will meet or surpass the domestic and global target of 1.8 and 2.25 million. For the next quarter Pacific Crest expects the company to set a target of adding roughly 350,000 local subscription and nearly 1.15 million global subscribers.
City research forecasted earnings of $3.66 per share and $7.62.however the market average is more bearish with EPS prospects of $3.29.
Pacific Crest analysts projected $1.47 and $3.31 earnings for fiscal year 2015 and 2015, respectively. Forecasted revenue is $6.69 and $8.45 billion for FY2015 and FY2016, respectively.
The video streaming service company is all set to publish its quarterly report on 15th April Wednesday. Mark May, analyst at Citi Said, “Our forecasts for 1Q15 are in-line with consensus and mgmt. guidance. And, while not a crystal ball, data from Google Trends does support our domestic subscriber estimate for 1.8mn net adds in 1Q15. Mgmt. does have a history of guiding 2Q domestic subs conservatively, which could create risk to current consensus forecasts, but all things equal we would likely view any pullback on that as an opportunity.”
47 analysts having coverage on Netflix Stock, out of those, 23 have given Buy rating and 18 have assigned Hold rating to the stock of the company. The twelve month average price target on the stock is $453.03.
The market average is earnings of $0.97 per share on revenue of $1.58 billion for the quarter covering from January to March 2015.