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The Bears In Netflix Are Highly Outnumbered

Manikandan Raman

Wall Street is getting more bullish on Netflix, Inc. (NASDAQ: NFLX), with the stock recently getting a recent upgrade from UBS to Buy from Neutral.

UBS Upgrade

Analyst Doug Mitchelson sees upside to the company’s first-quarter subscriber guidance given momentum in Europe and LatAm, and modest improvements in Japan.

In addition, the analyst pointed out that customer surveys reveal strong brand affinity and high user satisfaction regarding ease of use and content selection.

The recent fourth-quarter results showed the Internet streaming service significantly beat the U.S. and international growth expectations, while providing its first quarter international guidance above expectations as well. This is a testament to the Netflix’s improving fundamentals.

As such, the Street is also turning favorable toward the stock. The month of January saw three upgrades to the stock from Macquarie (Neutral from Underperform); Mizuho (Buy from Neutral); Deutsche Bank (Hold from Sell).

Bulls Outnumber Bears

Out of the 38 analysts covering Netflix, 24 of them rates the stock Buy, while 12 is having a Hold rating. Only, two analysts have a Sell rating on the stock. The mean recommendation is 2.4.

The data suggest Netflix bears are highly outnumbered.

The mean price target stands at $149.05, with a low and high price target between $68 and $175. Michael Pachter of Wedbush has a lowest price target of $68 and Jefferies’ John Janedis has a target price of $95. Both have a Sell rating on the stock.

On the other hand, the highest price target for Netflix at $175 comes from Doug Anmuth of JPMorgan, RBC Capital’s Mark Mahaney, Doug Mitchelson of UBS and Rob Sanderson of MKM Partners. All these analysts have a Buy ratings on Netflix.

The mean price target implies a potential upside of 6 percent, with the highest $175 target representing a potential return of 25 percent from the current levels. On the flip side, the lowest $68 price target implies a potential downside of 51 percent.

At last check, shares of Netflix were down 0.30 percent to $139.90. The shares have gained 45 percent in the last six months.

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  • Latest Ratings for NFLX

    Date Firm Action From To
    Mar 2017 UBS Upgrades Neutral Buy
    Jan 2017 Loop Capital Maintains Buy Buy
    Jan 2017 Macquarie Upgrades Underperform Neutral

    View More Analyst Ratings for NFLX
    View the Latest Analyst Ratings

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