Netflix (NFLX) International Subscriber Estimates Lowered at Nomura

Nomura Securities analyst Anthony DiClemente lowered international subscriber estimates and his price target on Netflix (NASDAQ: NFLX) but maintained a Buy rating.

"Ahead of Netflix's 2Q16 earnings report on July 18th, we take a closer look at our 3Q16 and 4Q16 estimates," DiClemente comments. "We believe that Netflix's international launches in 2H15 (Japan in 3Q15 and Southern Europe in 4Q15) may presage difficult YoY growth comparisons for international subscriber addition estimates in 2H16. As such, we modestly lower our international net additions estimates for 3Q16 and for 4Q16. Secondarily, we also revisit our analysis of the revenue benefit from US pricing increases that began in May 2016; we are cognizant, however, that modest subsequent churn may simultaneously prove a modest headwind to 2H16 US net additions."

The firm lowered 4Q16 international subscriber estimate to 3.23 million from 4.04 million.

In the U.S., the firm's base case scenario suggests that higher US pricing may drive ~480k cancellations across an estimated ~27 million. subscribers. However, incremental churn is more than offset by ~$520 million in incremental annual revenue across the remaining subscribers, supporting accelerating domestic streaming revenue growth for the remainder of 2016.

The price target goes to $115.00 (from $125.00).

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 $94.45 yesterday.

You May Also Be Interested In

• Needham Upgrades Netflix (NFLX) to Buy, 'on Rev Upside from Tech Stack'
• Uber Inc. (UBER) PT Raised to $96 at Tigress Financial Partners
• Alpine Income Property Trust (PINE) PT Lowered to $18 at Jones Trading