Analysts say Netflix has more room to run. Youssef Squali of Cantor is boosting his price target to $500 from $450, while Paul Vogel of Barclays sees shares rising to $450 rather than $400 in the next 12-months.
“We’re reiterating our BUY rating and increasing our PT (price target) to $500 from $450, following a recent pick-up in momentum around TV unbundling, which is likely to hasten the migration to Internet TV and disproportionately benefit Netflix,” Barclays’ Squali said in a note to clients. “At $8.99/month, Netflix offers access to one of the largest and lowest-priced online video content libraries, making it a top add-on for subscribers in an Internet TV world…Netflix spends more money on content than peers and boasts the greatest assortment of content.”
Barclays analyst Paul Vogel was slightly less optimistic in his note. He is more or less raising his price target simply because shares are currently trading at $425, above his previous call for $400 a share.
“Despite the growth, we have often wrestled with how to value the stock, given the relatively low profit per customer, increased content spend and stepped up global competition,” Vogul said in an note. “With increased spending likely to continue to depress margins and our increased conviction on slowing US subscribers we see limited upside to the stock at current levels.” He has an equal weight rating on the stock.
According to data from Bloomberg, 45.8 percent of analysts are recommending Netflix as a buy, 41.7 percent are calling it a hold, and 12.5 percent are telling people to sell.
Shares are up 12.1 percent over the past year, although they are well off their high of $489.287 reached in September.
