Cowen Reiterates Positive Stance on Netflix, Inc. (NFLX) Ahead of Prospective Charter Integration


Cowen analyst John Blackledge is all the more bullish on Netflix, Inc. (NASDAQ:NFLX) following CEO of Charter Tom Rutledge’s recent comments at an investor conference suggesting Charter is in the works to integrate the streaming giant into its set top box.

On the heels of this prospective integration, Blackledge reiterates an Outperform rating with a price target of $150, which represents a close to 22% increase from where the stock is currently trading.

From the analyst’s eyes, the NFLX/Comcast partnership could be crucial in setting up a precedent for the industry where other cable providers felt it was warranted to integrate NFLX.

Blackledge asserts that Rutledge’s comments “confirm our prior view that the NFLX/Comcast partnership, which went live recently, could set a precedent for the industry. NFLX set top box integrations remove friction from the sign up/in process and should benefit usage and adds over time.”

Providing some context, the analyst notes, “Following its acquisition of Time Warner Cable earlier this year, Charter is now the 3rd largest multi-channel operator in the US with ~17MM Video Subscribers as of the end of 1H16.”

Integrating Netflix into a set top box would mean that regular cable subscribers could have the option of watching NFLX on their televisions in addition to the channels available regularly. For this reason, Blackledge believes this integration could be considerably beneficial to Netflix, explaining, “NFLX set top box integrations remove friction from the sign up/in process and should benefit usage and adds over time.”

For Blackledge, this kind of Integration would provide a new way for Netflix to access to a wider and less technologically adept audience. “Based on our analysis, 12 of the top 25 US multi-channel operators do not have Netflix integrated within their respective box today, a cohort that represents ~55MM Video Subs as of 1H16,” the analyst surmises.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst John Blackledge is ranked #1,009 out of 4,274 analysts. Blackledge has a 58% success rate and gains 3.8% in his yearly returns. When recommending NFLX, the analyst yields 1.8% in average profits on the stock.

TipRanks analytics demonstrate NFLX as a Buy. Out of 35 analysts polled in the last 3 months by TipRanks, 19 are bullish on Netflix stock, 12 remain sidelined, and 4 are bearish on the stock. With a return potential of nearly 1%, the stock’s consensus target price stands at $124.07.