MKM Partners Weighs In on Netflix, Inc. (NFLX) and Oracle Corporation (ORCL); Here’s Why


Analysts at MKM Partners weighed in today on video streaming giant Netflix, Inc. (NASDAQ:NFLX) and software giant Oracle Corporation (NYSE:ORCL). The analysts reflect on Netflix’s upcoming quarterly earnings report and Oracle’s recent pricing and packaging changes.

Netflix, Inc.

MKM Partners analyst Rob Sanderson reiterated a Buy rating on shares of Netflix, with a price target of $145, as the company will kick off the Internet reporting season on January 19 after the market close.

Sanderson noted, “We expect a solid quarter with domestic subscriber additions slightly below guidance, but more significant upside from international adoption. An earlier than expected ramp of global availability will likely pull forward content spending assumptions, resulting in weaker 1H earnings guidance, but should also provide a steeper subscriber ramp for 2016 and 2017. Contact your MKM rep for our detailed subscriber model by region.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Rob Sanderson has a yearly average return of -4.4% and a 43.4% success rate. Sanderson has a 30.6% average return when recommending NFLX, and is ranked #3175 out of 3630 analysts.

Out of the 42 analysts polled by TipRanks, 27 rate Netflix stock a Buy, 12 rate the stock a Hold and 3 recommend Sell. With a downside potential of 0.4%, the stock’s consensus target price stands at $118.20.

Oracle Corporation

MKM Partners analyst Kevin Buttigieg reiterated a Neutral rating on shares of Oracle, with a price target of $42, which implies an upside of 18% from current levels.

Buttigieg wrote, “Recent pricing and packaging changes Oracle made to the low end of its database product line will raise prices for some customers, and could generate incremental revenues for the company or risk driving customers to alternative offerings, which has been a growing concern among Oracle investors in the face of increasing competitive rhetoric from Amazon (AMZN, Buy, $800) Web Services and NoSQL database alternatives. Either result is unlikely to be felt in Oracle’s fundamental performance given the size of the low end relative to the high end Enterprise Edition (which we estimate to be 90% of database revenues), but the results should provide Oracle with information about the elasticity of demand for its database that could help shape strategy vis-à-vis these competitive threats.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Kevin Buttigieg has a yearly average return of 2.8% and a 54.5% success rate. Buttigieg is ranked #1419 out of 3630 analysts.

Out of the 31 analysts polled by TipRanks in the last 3 months, 13 rate Oracle stock a Buy, 7 rate the stock a Hold and 2 recommend a Sell. With a return potential of 22.24%, the stock’s consensus target price stands at $43.26.