FBR Capital Upgrades Netflix (NFLX) to Outperform; $900 Price Target
FBR Capital upgraded Netflix (NASDAQ: NFLX) from Market Perform to Outperform with a price target of $900.00 (from $400.00).
Analyst Barton Crocket commented, "We are upgrading shares of Netflix, Inc. (NFLX) to Outperform and raise our price target to $900 (from $400). The key driver is our proprietary survey work, in collaboration with ClearVoice Research, LLC, which says that domestic Netflix subscribers—nearly 40% of TV households in the U.S.—love the service more than TV. Our survey (conducted in early April across more than 2,000 consumers representative of the U.S. in key demo categories) is consistent with the robust embrace apparent in Netflix's 1Q15 earnings report, post-close Wednesday, April 15. In this outpouring of affection, we see Netflix as very likely to move towards 180 million global subscribers by 2020 (over 60 million in the U.S.) and, over time, enjoy mid-single-digit-plus ARPU growth. This suggests domestic streaming can move slightly above Netflix's 40% contribution margin target by 2020, driving a DCF-supported, per-share value near $300. We see international streaming, with a market opportunity nearly 6x the U.S., worth nearly twice the U.S., supporting our $900 price target."
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Shares of Netflix closed at $475.46 yesterday.