What Major Analysts are Predicting for Netflix
All the attention is on Netflix due to the streaming giant report earnings after the new move.
Earlier this week, the company raised prices from 13 to 18%. Most analysts and investors were cheering on the move. Since then Goldman moved up their price forecast to $420 from $400, Guggenheim raised their price target to $400 from $370.
The price raise sky-rocketed the shares and the stock are now higher by more than 30% percent this year.
Take a look at what some of the other analysts have to say:
J.P. Morgan: Overweight Rating
J.P. Morgan said they tweaked down their 4Q paid net ads (1.28M US and 5.97M Int’l) and are now modestly below mgmt’s guide. It is driven by the above-mentioned back-end weight content slate. Nevertheless, they said more focus is on total net ads in 4Q and importantly 1Q paid net ads should benefit; Expectations on 4Q Int’l net ads are stealthily moving higher and based on their conversations he said they believe expectations are now somewhat above mgmt’s 7.60M total net ads guide; They added they deem FX could cause NFLX to some extent miss reported 4Q revenue and operating income. They lowered their 4Q revenue by 0.5% to $4,179M (vs. $4,199M guide) and their 4Q operating income by 2.9% to $199M (vs. $205M guide).
Goldman Sachs: Purchase Rating
Goldman Sachs, the analyst said they anticipate Netflix to report 4Q results well above after the close and provide initial guidance for 1Q in-line or reasonably above Fact Set consensus. In their opinion, the strong release slate in the quarter, broadening distribution network and growing content library, combined to drive this outperformance. And they should continue to do so in the year ahead since 2017/18’s major increase in cash content investment pays off.
They added whereas the stock has notably outperformed since the start of the year as investor expectations have raised, creating some risk around the print itself, they continue to believe that as Netflix surpasses the expectations of investor for subscriber growth and profitability throughout 2019 shares will continue to outperform.
Guggenheim: Purchase Rating
Analyst Guggenheim said that their investor conversations on Netflix cover a wide range of topics, though they can boil these topics down to 3 key questions: How many subscribers? At what price? At what profit? Whilst tonight’s call will probably give insight into near-term trends and overall strategy, he added the objective of their recently published work is to offer context for those results. They reiterate their BUY rating and raise their price target to $400 from $370.
Nomura Instinet: Neutral Rating
The analyst noted they anticipate solid Q4 results, supported by their quarterly U.S. survey, driven by strong content releases, including Bird Box, Bodyguard, The Haunting of Hill House, and more. With the stock up 30%+ over the past month, expectations are also high.
Cowen: Outperform Rating
Cowen stated they anticipate solid 4Q18 results, led partly by NFLX adding a record number of Original programming hours, + 88% y/y. Their latest US survey data hints NFLX maintains its lead in the living room, mainly among younger demos. Their estimates are largely unaltered, incorporated Oct. debt raise and rolled model forward to ’29. PT unchanged at $430, Maintain Outperform.
Bank of America: Buy Rating
An analyst from Bank of America stated that after a mixed year, Netflix remains positioned for growth. The year 2018 was a mixed year for NFLX. The fundamentals improved and the stock finished the year up by 32% only after declining 28% from Labor Day through year-end. Subscriber growth (assuming 4Q is in line with guidance) ended up effortlessly exceeding estimates of the beginning of the year in spite of a substantial 2Q miss and low original 3Q guide shaking the confidence of the investor. Moving forward, key questions include the cost of content and cash burn as competitive streaming offerings rise up (peers estimated to spend $25bn on content in ’19). They are keeping their Buy rating and PO of $440.
