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Netflix, Inc. (NFLX) Performance at the Emmy’s: Mixed Reactions from Analysts

By Howard Kim 

Netflix, Inc. (NASDAQ:NFLX) won four awards at last week’s Emmy’s out of 34 nominations. Although this is a drop from last year when the online streaming service won seven Emmy’s, it is still an impressive feat. Analysts Neil Doshi and Youssef Squali weigh in on this performance.

Neil Doshi from Mizuho was disappointed with Netflix’s performance. “Given that Netflix is investing heavily in new original content, we would have expected to see more success from these investments.” In February 2015, the company had announced plans to raise debt of $1.5 billion to invest in content acquisitions. Doshi also expressed concern about the lack of nominations for Netflix’s newer shows like Marco Polo and Daredevil.

Canton Fitzgerald’s Youssef Squali is more positive about the performance. He said, “While Netflix’s tally is somewhat disappointing, considering last year’s seven emmys, it’s still a notable performance for an $8.99/mo service, which started in 2012, and long underestimated by larger and more established content creators.”

Given that Netflix and Amazon received 46 nominations in total, as per Squali, this is a “is a clear indication to us that content created by emerging OTT streaming services is a growing threat to the establishment, and that it’s a matter of time before these start rivaling and potentially exceeding their linear cousins, in our view.”

Squali noted the positive reviews for Narcos, the latest original from Netflix. Also, Netflix’s aggressive rollout in Asia makes the company well-poised to be present in 200 countries by the end of next year. Netflix had recently increased subscription rates in European markets, which was also noted as a positive by Squali.

Doshi maintained a Neutral rating on Netflix with a price target of $115. Squali, on the other hand, reiterated a Buy rating with a price target of $125.

Squali’s ratings are similar to a majority of the 29 analysts on TipRanks who have rated the stock (21 have suggested Netflix as a Buy). Among others, 6 analysts have given a Hold rating, while 2 analysts have recommended a Sell for Netflix.

Squali’s price target is closer to the average consensus price target of $123.20, based on targets given by all 29 analysts over the past 12 months. The consensus target is a 25.11% upside from current levels.

Youssef Squali’s has an 89% success rate recommending Netflix since 2010 with a +75.8% average return per NFLX rating.

Neil Doshi has rated the online streaming company seven times since 2013 with an average loss of -13.4% per rating.