As the clear market leader in streaming video content, Netflix, Inc. (Nasdaq: NFLX) has a major target on its back. However, the company continues to execute its global strategy, and NFLX stock earned its highest Wall Street price target yet.
GBH Insights head of technology research Daniel Ives raised his price target this week for Netflix from $400 to $500. The new target represents the highest Netflix target among the 36 analysts who currently cover the stock, according to FactSet.
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Ives says Netflix isn’t concerned about growing competition from Amazon.com ( AMZN), Apple ( AAPL), Alphabet ( GOOG, GOOGL), AT&T ( T), Walt Disney Co. ( DIS) and others. While the rest of the media group is doing everything in its power to catch up to Netflix, Ives says the gap between Netflix and the competition is only getting wider.
“We believe Netflix remains in a unique position of iron-like strength to grow its content and distribution tentacles over the next 12 to 18 months and thus further build out its massive content and streaming footprint,” Ives says.
In the long term, Ives estimates Netflix can increase its international subscriber count from 68 million today to 100 million by the mid-2020s. A recent GBH survey revealed that 87 percent of current Netflix subscribers are also open to another monthly price increase in the future.
Ives estimates Netflix will reach $10 in earnings per share by 2022.
“Our bullish thesis on Netflix is based on our belief that the company’s competitive moat, franchise appeal, ability to increase international streaming customers through 2020, and original content build out will translate into robust profitability and growth as the next phase of this story plays out,” he says.
Ives isn’t the only analyst getting more bullish on Netflix. Piper Jaffray analyst Michael Olson says recent Google search trend data suggests Netflix could once again surprise to the upside with its international subscriber growth in the second quarter.
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“For international, Q2 consensus calls for 40.9 percent year-over-year [subscriber] growth, and our index points to 48.7 percent growth,” Olson says. Piper Jaffray’s search data has historically had a 0.92 to 0.93 correlation to Netflix’s actual reported subscriber numbers.
In addition to the $500 price target, GBH Insights has a “highly attractive” rating for Netflix. Piper Jaffray has an “overweight” rating and $420 target for NFLX stock.
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Netflix, Inc. (NFLX) May Cook Up Another Huge Quarter originally appeared on usnews.com
