• News
  • Markets
    • Bonds
    • Commodities
    • Economy
    • ETFs & Mutual Funds
    • Forex
    • Futures
    • Global Economies
    • Options
    • Previews
    • Small-Cap
    • Stock Analysis
    • Reviews
  • Personal Finance
    • Budgeting
    • Credit Cards
    • Debt
    • Insurance
    • Loans
    • Mortgages
    • Retirement
    • Savings
  • FinTech
  • Business
    • Autos
    • Energy
    • Entrepreneurship
    • Food & agriculture
    • Pharma & healthcare
    • Real estate
    • Retail
    • Sports Money
  • Reviews
  • Tax
  • Crypto Currency
  • About us
MoneyJournals
MoneyJournals
  • News
  • Markets
    • Bonds
    • Commodities
    • Economy
    • ETFs & Mutual Funds
    • Forex
    • Futures
    • Global Economies
    • Options
    • Previews
    • Small-Cap
    • Stock Analysis
    • Reviews
  • Personal Finance
    • Budgeting
    • Credit Cards
    • Debt
    • Insurance
    • Loans
    • Mortgages
    • Retirement
    • Savings
  • FinTech
  • Business
    • Autos
    • Energy
    • Entrepreneurship
    • Food & agriculture
    • Pharma & healthcare
    • Real estate
    • Retail
    • Sports Money
  • Reviews
  • Tax
  • Crypto Currency
  • About us
  • Follow
    • Facebook
    • Twitter
    • RSS
Netflix Gets Price-Target Hike
Home
Markets
Reviews

Netflix Gets Price-Target Hike

July 15th, 2017 Matvei Konstantinov Markets, Reviews 0 comments

Netflix’s (NFLX) stock has just received a price-target increase, with analysts saying that the market is underappreciating the company’s potential for higher earnings.

On Thursday, July 13, Morgan Stanley analyst Benjamin Swinburne upped the company’s price target to $185 from $175, but reiterating his overweight rating on the Internet television network’s stock.

Netflix stock hit its record high of $166.87 on June 9, and has continued to form a “flat base” over the past few weeks with a buy point of $166.97, Investors.com reports. On Wednesday, the stock climbed over its 50-day moving average showing bullish signs.

Netflix Stock

According to Swinburne, there is a positive correlation between the amount of content Netflix streams in a region and how much viewers there are in that region. As newer markets get more content, subscription growth in those regions will continue to increase.

Netflix spends billions on content, which is partially funded through a growing debt load, Variety reports. As of March 2017, the network has $11 billion worth of content assets. According to Swinburne, Netflix-owned original movies and TV shows make up 15 percent of the total content assets. The network’s original content includes series “Stranger Things,” “Orange is the New Black,” “Glow,” and “13 Reasons Why,” as well as comedy special “Okja” and movies like “War Machine.”

At the same time, the network has also been cancelling underperforming shows like “Sense8,” “Girlboss,” and “The Get Down.” This implies that Netflix may be expected to pump more money into originals.

According to Swinburne, the more original content, the better for the company. “As Netflix owns more of its content outright, the longer average life and increasingly global nature of its assets could drive increased content efficiencies and higher margins over time,” Swinburne wrote.

The network’s net content value is even bigger than that of Warner, which currently has $10 billion, and larger than Viacom, Discovery Communications, AMC Networks and Scripps Network’s combined content assets of $4.9 billion, $2.4 billion, $1.5 billion and $1.1 billion, respectively.

 

For the premium video-on-demand sector, Netflix currently competes with Amazon.com (AMZN) and Time Warner’s (TWX) HBO among others.

However, Swinburne pointed out that the Netflix’s revenue from these content is still behind that of traditional TV and film titans. The network generates a revenue of bout $1 for every dollar of net content value, while traditional entertainment conglomerates get about $2 to $4.

netflix stock

“Netflix is building a much larger profit pool than the market understands,” the analysts wrote in the research note.

While there is no guarantee that the network can monetize its content with the same rate of returns as that of traditional TV networks, considering that Netflix does not offer advertising, there is still a significant potential for the company to drive earnings, the Morgan Stanley analysts said.

However, not all analysts agree. On Wednesday, Wedbush Securities analyst Michael Pachter maintained his underperform rating on Netflix stock with a price target of $73.

“As competition drives the cost of content inevitably higher, we expect Netflix cash burn to continue, and management acknowledged that this will persist for ‘many years,’” Patcher wrote. “International profits may remain elusive due to competition for content and subscribers, while domestic growth inevitably decelerates.”

On Thursday, consulting firm Media Partners also said that the network is currently struggling to get more subscribers in the Asia-Pacific region, Nikkei Asian Review reports. Asia-Pacific subscriber base is about 4.8 million, which is only about 1.4 percent of the total paid online video subscribers in the region, which is at 341 million.

A Reuters poll also showed that password sharing has become a growing problem for Netflix. According to the survey, at least 21 percent of streaming viewers aged 18 to 24 said they had used another person’s log-in credentials on a digital video service. About 12 percent of adults are said to be doing the same thing.

Facebook Twitter Google+ LinkedIn Pinterest
Next article Target Lifts Retail Shares, Dow Closes at Record High
Previous article Snap Stock Tumbles Below IPO for the First Time

Matvei Konstantinov

Matvei is a personal finance professional, entrepreneur, and savvy writer. Matvei’s frugal, yet driven nature applied as the leader of our credit card review team helps our visitors to plan and capitalize on saving opportunities.

Related Posts

Amazon’s Online Market Share Estimate Cut for the US Business
June 14th, 2019

Amazon’s Online Market Share Estimate Cut for the US

Musk States Consumer Demand Not an Issue Autos
June 12th, 2019

Musk States Consumer Demand Not an Issue

Auto Markets Plunge after Fiat Walks Away from Renault Deal Autos
June 7th, 2019

Auto Markets Plunge after Fiat Walks Away from Renault Deal

Leave a Reply Cancel reply

Market Quotes by TradingView
Weekly Timeline
Oct 28th 8:02 PM
Personal Finance

How Do I Pay for Living Expenses While in School?

Oct 7th 8:00 AM
Uncategorized

4 Reasons AI is the Future of FinTech

Oct 6th 7:08 PM
Business

A Detailed Guide to Architect Salaries

Jul 29th 9:52 AM
Business

Should Your Business Get a Cryptocurrency License?

Jun 14th 6:03 AM
Business

Amazon’s Online Market Share Estimate Cut for the US

Jun 12th 5:54 AM
Business

Musk States Consumer Demand Not an Issue

Jun 10th 1:03 PM
Uncategorized

United Technologies Buying Raytheon in All-Stock Deal

Weekly Quote

I like the dreams of the future better than the history of the past.

Thomas Jefferson
  • News
  • Markets
  • Personal Finance
  • FinTech
  • Business
  • Reviews
  • Tax
  • Crypto Currency
  • About us
  • Back to top
Money Journals

About Money Journals News

MoneyJournals.com advises to carefully examine any claim or suggestion made by financial advisers, Journalists or bloggers, before investing or trading under any Brokerage. materials presented in Money Journals.com should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. Money Journals supplies general market commentary and does not constitute investment or trading advice.

Additional information

  • About us
  • Our staff
  • Contact us
  • Write for us
  • Privacy Policy
  • Terms Of Service
© MoneyJournals 2017. All rights reserved.