Bank of America on Netflix Following Q2 Earnings

In a note released Tuesday morning Bank of America analyst, Nat Schindler maintained his Underperform rating on Netflix NFLX. However, he raised his price target from $246 to $294 based on a sum-of-the-parts analysis which assumes a 15 x S&P 500 multiple at peak penetration of 60 million U.S. and 80 million European subscribers, as well as a $2 price increase. Schindler noted that the company's second quarter was in-line and there was "nothing to change the minds of bulls or bears". Looking ahead, Schindler is predicting that Netflix won't break-even internationally until the fourth quarter of 2015 assuming no further market expansion. Additionally, he is looking for the company to hit 35 percent contribution margins on current prices long-term. Shares of Netflix were up about 0.7 percent in Tuesday's pre-market, at last check, after closing up 1.75 percent at $451.95 on Monday.
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Posted In: Analyst ColorNewsPrice TargetReiterationAnalyst RatingsBank of AmericaNat Schindler
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