JPMorgan Lifts PT on Netflix (NFLX) Above $200 on Strong Content Differentiation

February 13, 2013 9:20 AM EST
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JPMorgan analyst Doug Anmuth boosted his price target on Overweight-rated Netflix (NASDAQ: NFLX) from $180 to $205 following management meetings with Netflix Founder and CEO Reed Hastings and Chief Content Officer Ted Sarandos.

"Overall, we came away confident that Netflix is back on track toward significantly disrupting the linear TV market through strong subscriber growth, content differentiation, and a better consumer proposition," Anmuth stated. "Early feedback on House of Cards is encouraging and we believe originals could help drive subscriber upside in 2013."

The analyst said Netflix noted that viewership of House of Cards has exceeded expectations and the show was the company's most watched title since its February 1 release. "The average House of Cards viewer has watched multiple episodes, a testament to Netflix's decision to release all 13 episodes of the series at the same time," they said. "We note that House of Cards currently has a user rating of 4.6 stars on 252k ratings in its first 11 days. For comparison, Mad Men currently has a rating of 4.1 stars on 2.7M ratings."

"Importantly, we believe the value of House of Cards, and potentially other original content, is likely to increase over time as more members view the content in subsequent years. Netflix has seen a similar effect as it has helped more users discover shows like Mad Men and Breaking Bad, likely increasing viewership to a multiple of what they have on AMC."

Netflix likely to push further into originals to differentiate content, the analyst also said.

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

Shares of Netflix closed at $177.95 yesterday.

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