Netflix (NFLX) Estimates Cut at Credit Suisse Post Q2; PT to $122
Credit Suisse analyst S. Ju reiterated an Neutral rating but bumped its price target on Netflix (NASDAQ: NFLX) to $122.00 (from $119.00) following disappointing Q2 results.
Ju commented, "ting un-grandfathering in the US, as well as larger International markets, and the upcoming Olympics, Netflix provided lower-than-expected sub growth guidance for Int'l for 3Q16 - that said as it continues to see withinexpectations gross adds, this suggests that demand for Netflix's services remains robust and once this period of elevated churn due to price hikes is behind us, it should resume normalized net add growth. Hence, contrary to the guidance of 2Q16, we have not decreased the slope of Int'l growth for 2017 and beyond. This compounded with lower-than-expected content costs drive our price target modestly higher. We remain on the sidelines for now on valuation and maintain our Neutral rating."
EPS projections for FY16 are now $8.88 billion and $0.51 vs. prior $9.04 billion and $0.59. The lower 2017-18 adj. EPS estimates to $1.39/$2.84 from $1.83/$3.28 respectively.
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Shares of Netflix closed at $98.81 yesterday.