Cowen Boosts Int'l Sub Growth Outlook for Netflix (NFLX); Lifts Price Target to $760

Cowen and Company is boosting its international subscriber outlook on Netflix (Nasdaq: NFLX) and moving its price target from $625 up to $760. The firm has NFLX with an Outperform rating.

Analyst John Blackledge now sees NFLX with intentional subscribers of about 104 million by 2020, up from a prior estimate of 62 million. The analyst continued, Given the higher Int'l sub forecast, we now forecast to revenue in '16 of $8.8 billion (vs. $8.6 billion prior) and adj. EPS of $2.96 (vs. $4.43) as NFLX has guided to flattish global EPS (GAAP) in '16, and revenue in 2020 of $17 billion (vs. $13.5 billion) and Adj EPS of ~$38 (vs. ~$28).

On China, Blackledge commented: We expect NFLX to enter China at some point (e.g. JV with China-domiciled partner), though we do not include entry into China in our current Int'l sub forecast. Our sensitivity analysis suggests China could add 9 millionto 27 millionsubs '17-'20, assuming NFLX enters China in '17 with modest penetration rates (0.5%/annum to 1.5%/annum) through '20. Demand for NFLX programs is high, House of Cards is one of the most pirated shows in China, but could be offset by low ~$4 monthly PayTV ARPU and piracy issues.

For an analyst ratings summary and ratings history on Netflix click here. For more ratings news on Netflix click here.

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