All posts from TipRanks
TipRanks in TipRanks,

Netflix Inc. (NFLX): Analysts Weigh In Ahead of the Company’s Earnings Release

By Christine Brown

Netflix, Inc. (NASDAQ:NFLX) is expected to announce its quarterly earnings on October 14th. Analysts from UBS, Mizuho and BMO Capital weigh in ahead of earnings.

On October 8th, BMO Capital’s Daniel Salmon initiated coverage of Netflix’s stock with a Market Perform rating and a price target of $115. Salmon said, “With Netflix the focal point for disruption of the traditional TV ecosystem, we believe NFLX shares properly value the opportunity and the inherent risks of this position and would look for a pullback or incremental news (e.g., faster-than-expected international expansion) to get more productive on the stock. With high volatility around the quarters – largely driven by subscriber growth performance versus guidance and expectations – investors tend to get opportunities regularly.”

Salmon attributes his rating to several variables, including; “the evolution of Netflix’s content acquisition strategy to focus more on originals;” “pricing power for the service, especially in the United States;” and “a risk of accelerating marketing expense growth as competition increases, new markets are entered, and premiering originals are in need of promotion.” Salmon concluded, “But all in all, we view Netflix as a highly dynamic company and an innovation leader in our coverage universe.”

On October 9th, Douglas Mitchelson from UBS maintained a Buy rating for the stock with a price target of $143. According to The Fly, Mitchelson made a note of the strong performance of Netflix in the US, and feels the set-up for the stock is favorable. In light of the growing competition in the US, Mitchelson says “the international momentum outweighs any U.S. risk.”

On the same day, Neil Doshi from Mizuho maintained a Neutral rating for Netflix’s stock and a price target of $115. According to The Fly, Doshi commented, “After analyzing how Netflix seems to differentiate itself in Japan, which has a highly competitive [subscription video on demand market], that it appears the company’s content is still lacking there.” Doshi remains “somewhat cautious” ahead of the company’s earnings.

As per TipRanks’ statistics, out of 28 analysts who have recently rated the stock, a majority (19) have rated it as a Buy, 7 have rated is a Hold, and 2 have recommended to Sell the stock. As per consensus estimates, the average price target for Netflix is $121.63, an upside of nearly 7% from current levels.