Cantor Boosts PT on Buy-Rated Netflix (NFLX); Likes Icahn Support, Ripe for M&A
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Price: $80.28 +0.17%
Rating Summary:
57 Buy, 26 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
57 Buy, 26 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Netflix (Nasdaq: NFLX) shares are ticking slightly higher in early trading following an improved outlook at Cantor Fitzgerald issued earlier.
The firm boosted its price target on Netflix from $68 to $85, maintaining a Buy rating on the stock. The company cited rolling-over its seven-year DCF by an additional year. Cantor's new PT assumes "EBITDA grows at a 29% CAGR with unlevered FCF going from ($12.9M) in FY:13 to $685.3M by FY:20."
Cantor notes that Netflix recently reported record low churn and average viewing per member increasing 30 percent in its recent quarter, all while major broadcasters continue to bleed subs.
Cantor also echoes sentiment from Carl Icahn, who said the Netflix is undervalued given its dominant market position. On Icahn, Cantor noted, "[g]iven Netflix' staggered board, recently announced poison pill and timing for the next shareholder meeting (June/July), we believe Mr. Icahn's best possible outcome is a quick strategic sale of the company. His next best option, which we believe is more likely, would be to nominate directors and gradually affect change from within, as he is known to do."
But there's also the M&A potential for Netflix. Cantor sees front-runners in bids being Apple (Nasdaq: AAPL), Amazon.com (Nasdaq: AMZN), Microsoft (Nasdaq: MSFT), and Google (Nasdaq: GOOG). Out of all the candidate, the firm thinks Netflix would be a natural fit for Amazon, given Amazon's recent push with On Demand video and Netflix selection and brand name. Apple would gain iTV set launch support via Netflix streaming content and Microsoft has yet to make a presence in mobile.
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 $76.37 yesterday.
The firm boosted its price target on Netflix from $68 to $85, maintaining a Buy rating on the stock. The company cited rolling-over its seven-year DCF by an additional year. Cantor's new PT assumes "EBITDA grows at a 29% CAGR with unlevered FCF going from ($12.9M) in FY:13 to $685.3M by FY:20."
Cantor notes that Netflix recently reported record low churn and average viewing per member increasing 30 percent in its recent quarter, all while major broadcasters continue to bleed subs.
Cantor also echoes sentiment from Carl Icahn, who said the Netflix is undervalued given its dominant market position. On Icahn, Cantor noted, "[g]iven Netflix' staggered board, recently announced poison pill and timing for the next shareholder meeting (June/July), we believe Mr. Icahn's best possible outcome is a quick strategic sale of the company. His next best option, which we believe is more likely, would be to nominate directors and gradually affect change from within, as he is known to do."
But there's also the M&A potential for Netflix. Cantor sees front-runners in bids being Apple (Nasdaq: AAPL), Amazon.com (Nasdaq: AMZN), Microsoft (Nasdaq: MSFT), and Google (Nasdaq: GOOG). Out of all the candidate, the firm thinks Netflix would be a natural fit for Amazon, given Amazon's recent push with On Demand video and Netflix selection and brand name. Apple would gain iTV set launch support via Netflix streaming content and Microsoft has yet to make a presence in mobile.
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 $76.37 yesterday.
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