Yahoo Finance Pacific Crest Analyst Sees 47% Upside in Shares of Netflix
On Thursday, Pacific Crest upgraded shares of Netflix (NASDAQ: NFLX) from Sector Perform to Outperform and announced a $500 price target.
Analyst Andy Hargreaves expects “international expansion to accelerate meaningfully over the next 18 months.” The analyst added, “international margins appear to be progressing faster than in the United States on a country-by-country basis.”
The analyst sees “significant latent pricing power,” as U.S. Netflix subscribers pay $0.16 per viewing hour, versus $0.50 for the average TV subscriber.
“A $1 increase to Netflix's U.S. average revenue per user would drive 2016 domestic operating income estimate up by 84% to $1.61 billion,” according to Hargreaves.
There may also be an opportunity for Netflix to “enter new businesses like ad-supported video,” said the Pacific Crest analyst.
The stock is up 2.8 percent to $340.78 in Thursday's trading. The price target represents 47 percent upside from current levels.
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