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Bob Peck Pores Over Netflix Results, Lifts Target To $550

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SunTrust Robinson Humphrey on Thursday issued an earnings recap of Netflix, Inc. (NASDAQ: NFLX). SunTrust Robinson Humphrey rates Netflix as Neutral and raised its price target from $480 to $550.

Analysts Bob Peck and Rodney Hull wrote, "We believe NFLX to be the dominant internet streaming video service, offering consumers a robust yet highly curated selection of premium television and movie content. The company is at the forefront of the secular shift to premium streaming video and boasts a large installed customer base, strong brand, focused strategy, superior monetization model, and growing portfolio of differentiating original content.

"While we are comfortable with near-to intermediate-term top-line expectations, we do not see upside to margins/bottom-line as we suspect international profitability may be slower to turn up as the company invests in content and brand. The continued launch of new markets and original content should also continue to weigh on cash flow."

Related Link: FBR Just Put Netflix's PT At $900...Or $500 Higher Than Before

Netflix is continuing to expand internationally as its growth in subscribers from 2.4 million to 2.5 million can be partly attributed to new market opportunities in Australia and New Zealand. Domestically, Netflix outperformed consensus estimates of 2.1 million subscribers by reporting 2.6 million paid subscribers.

Netflix reported EPS of $0.77 vs consensus estimates of $0.63, exceeding expectations. However, SunTrust sees an increased competition for subscribers as other companies try to take market share from Netflix. This may increase the cost of content and decrease profits for Netflix in the future. In the short term, Netflix can use its size to increase its leverage and possibly conduct share buybacks.

Shares of Netflix were up more than 12 percent at $536.2 shortly after the opening bell.

Latest Ratings for NFLX

Jul 2017Credit SuisseMaintainsNeutral
Jul 2017RosenblattUpgradesNeutralBuy
Jul 2017NomuraMaintainsBuy

View More Analyst Ratings for NFLX
View the Latest Analyst Ratings

Posted-In: Robert Peck Rodney Hull SunTrust Robinson HumphreyAnalyst Color Price Target Analyst Ratings


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