Netflix, Inc. (NASDAQ:NFLX) shares are enjoying a nice 3% wave of confidence from investors today following last night’s Oscar win for Icarus as best documentary feature.
GBH Insights analyst Daniel Ives considers the video streaming content king’s slew of eight Oscar nominations are yet “another ‘feather in the cap’ for the Netflix content machine,” cheering a “long runway ahead.”
As such, the analyst reiterates a Highly Attractive rating on NFLX stock with a price target of $310, which aligns with current levels. (To watch Ives’ track record, click here)
“Netflix’s ability to attract original content, talent, artists, writers, and producers to its platform is a key ingredient in its long term recipe for success to grow its streaming service globally and tonight’s nominations is a major credibility step for these efforts in our opinion. To this point, Netflix is quickly establishing itself within Hollywood as a highly credible platform with broad distribution, unlimited resources (planning to spend ~$8 billion on content in 2018), and capabilities that can get movies/documentaries recognized by the Academy and other major award circles globally, which has been a hurdle over the past few years as high level A+ Hollywood talent was worried in some cases about this dynamic and shunned Netflix for other traditional studios,” highlights Ives.
It is not that rivals like Disney and the House of Mouse’s new acquisition Fox do not loom as “a clear competitive worry.” However, the analyst still appreciates that the company stands in a standout footing of power to develop its content and extend its “distribution tentacles” throughout the next year to year and a half. A “appetite for content among media companies [reaches] a feverish pitch,” this tech player is set to shell out as much as $8 billion on content this year- a marked around $1 billion rise from last year’s spending patterns. Ultimately, Ives places “clear first mover advantage” and heavyweight growth and opportunity with Netflix and its electric “franchise appeal.” As the company continues to hike its international streaming customers throughout the next two years, this is a growth narrative playing out in NFLX’s favor.
TipRanks shows a large amount of bulls liking the odds on this online content king. Out of 33 analysts polled in the last 3 months, 23 are bullish on Netflix stock, 9 remain playing it safe on the sidelines, while just 1 runs for the hills on the stock’s opportunity. However, is the stock overvalued or undervalued based on these analysts’ expectations? Consider that the 12-month average price target of $275.94 suggests a nearly 11% downside potential from where the stock is currently trading.