Wedbush Morgan Upgrades Netflix (NFLX) to Buy, Citing Valuation and Growth
NFLX Hot Sheet
Rating Summary:8 Buy, 15 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 22 | Down: 8 | New: 36
Wedbush Morgan upgrades Netflix, Inc. (Nasdaq: NFLX) from Hold to Buy with a $48 price target, citing compelling valuation. The firm also said higher pricing and streaming traction should drive revenue and margin growth.
Analyst Micael Pachter said, "As streaming gains in popularity and Netflix realizes higher margins, we expect the company to reinvest a portion in more streaming content. Management made clear its intention to balance EPS growth with further investment in streaming content and subscriber growth, so we think it is likely that the company may choose to reinvest a portion of the 2009 and 2010 EPS upside to consensus that we have modeled."
The firm also said the recent increase in Blu-ray pricing could drive APRU higher.
Analyst Micael Pachter said, "As streaming gains in popularity and Netflix realizes higher margins, we expect the company to reinvest a portion in more streaming content. Management made clear its intention to balance EPS growth with further investment in streaming content and subscriber growth, so we think it is likely that the company may choose to reinvest a portion of the 2009 and 2010 EPS upside to consensus that we have modeled."
The firm also said the recent increase in Blu-ray pricing could drive APRU higher.
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