Raymond James Upgrades Netflix Post Q1 Earnings

by Kurt Zuschlag, Benzinga Staff Writer

April 22, 2014 11:36 AM | 1 min read | Make a Comment

On Tuesday, Raymond James upgraded shares of Netflix

NFLX

from Market Perform to Outperform and announced a $450 price target. The upgrade comes a day after the company

first quarter earnings and offered second quarter guidance. Analyst Aaron Kessler's upgrade is based on:

Strong subscriber growth and significant total addressable market. The analyst believes Netflix “can reach ~55 million long-term domestic subs and 60 million plus international subs.”
Improving operating margins -- “Domestic streaming margins increased 460 bp y/y (driven by lower marketing and content cost leverage,” said the analyst.
Price increases “will enable Netflix to continue to invest in higher quality content and thus attract more users.”

Shares are up 6.2 percent to $369.99 from Monday's closing price of $348.49.