Bob Peck: New Data Shows Netflix International Subs Have Upside In Q1

In a report published Tuesday, SunTrust Robinson Humphrey analysts maintained a Neutral rating on

, while raising the price target from $410 to $480. "Our new proprietary checks suggest upside in International subscribers in 1Q driven by strength in new markets (Australia + New Zealand) and Latin America," the analysts said. The international paid subscriber estimate for 1Q has been raised from 19.2M to 19.6M. The new proprietary checks suggest domestic subs as below guidance, albeit only modestly (about 2 percent). The domestic paid subscriber estimate for 1Q has been reduced to 39.8M. In the report SunTrust Robinson Humphrey noted, "International revenue (26% of total in 4Q) is likely facing currency headwinds with the most relevant currencies (CAD, GBP, EUR, BRL, MXN) down -4% to -11% (daily average) sequentially in 1Q and another -1% to -9% thus far in 2Q. This pressure should manifest in lower International ARPU." "However, while NFLX does not actively hedge its currency exposures (via financial hedges), the company does have a natural hedge as content costs are also primarily priced in the native currency. As such, the impact at the gross profit line should be negligible," the analysts said. The GAAP EPS estimates for 1Q, 2Q, 2015 and 2016 have been reduced from $0.60 to $0.56, from $0.83 to $0.73, from $2.91 to /$2.62 and from $5.09 to $3.85, respectively, to reflect FX impact and higher interest expense in view of the $1.5B debt raise in February.