Cowen Trims PT on Netflix (NFLX) to $135; Q1 Results Solid, But Int'l Guide Light
Cowen and Company affirms Netflix (Nasdaq: NFLX) at Outperform, but trims its price target from $155 down to $135 following Q1 results reported Monday night.
Analyst John Blackledge commented, Netflix reported solid 1Q16 results, as US subs beat handily, while Int'l was above guide. For 2Q16 the US sub guide was solid at +500K (the key concern into the print), but Int'l sub guide was light +2 million vs. our 3.1 million est. and cons. at 2.8 million, given tough comp. We modestly lowered long-term Int'l subs, US up slightly. Net-net, long-term forecast down slightly.
Estimate changes: For 2Q16, we now estimate Int'l net adds of 2.2 million, with the bulk of the reduction from ROW and '15 launches. For '16, we now estimate Int'l net adds of 12.7 million vs. 14.5 million prior. For the US biz, we now estimate 2Q16 net adds of 517K (vs. 630K prior), and 5.05 million vs. (4.7 million prior) for 2016 given the 1Q16 beat, as the US biz, the focal point of the pre-print discussion appears on solid footing. Longerterm we lowered Int'l sub forecast to 110 million in '21 (vs. 117 million prior), while US is up slightly.
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