Netflix (NFLX) PT Raised to 'Street High' $500 at BMO Capital

BMO Capital analyst Daniel Salmon raised the price target on Netflix (NASDAQ: NFLX) to $500.00 (from $450.00) while maintaining an Outperform rating. The price target is a new 'Street High', topping $490 from Goldman Sachs and Pivotal Research. The firm cited lower content expenses and higher FCF.

Salmon commented, "We now forecast Netflix to invest $16.9B in cash content expenses ($11.1B in amortized P&L expense) in 2020, down from $17.3B previously. In 2021 however it increases from $19.7B to $19.8B, and it is possible the shift is more pronounced than we model, particularly if live productions remain on hold well into 2H or 2021. Our 2028 cash content expense declines to $22.8B from $26.3B. Recent content highlights include a long-term partnership with Nickelodeon for animated originals (key to shoring up kids programming in the face of Disney+), a 3-year deal with top Korean media conglomerate CJ ENM, a newly announced first-look deal with Boom! Studios, and $400mm expenditure on Indian content over the years 2019-20."

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