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Top Analyst Believes the Netflix (NFLX) ‘Formula Is Working Well’

Brian White looks for 13% in upside potential for NFLX shares as he transfers coverage with an even more bullish take.


Netflix (NASDAQ:NFLX) is trailblazing as the #1 internet TV network across the globe, and top analyst Brian White at Monness Crespi is taking notice from the bullish camp.

Singing the praises of the tech player’s “over the top success,” the analyst transfers coverage of Netflix with a Buy rating while bumping up the price target from $300 to $350, which implies a 13% upside from current levels.

White explains his confidence in a wealth of global prospects ripe for Netflix’s picking: “Netflix continues to add more engaging licensed and original content that is driving strong streaming membership additions. Last year’s successful price hike is a testament to the value consumers see in the company’s service and we believe the company continues to have big opportunities for growth around the world.”

Spotlighting an uncharted mammoth broadband subscriber market prime for Netflix’s streaming platform, the analyst sees “plenty of room for growth” ahead.

“Netflix ended 2017 on a strong note with much stronger than expected registered global net adds relative to the company’s guidance and Street expectations. This was especially impressive given the company implemented a price hike in November 2017, its first since 2014. Netflix exited 2017 with 117.6 million (up 25%) streaming memberships and generated total revenue of $11.69 billion (up 32%). With an intuitive user interface and easy to use mobile app, combined with an ever-expanding library of compelling licensed and original content, Netflix’s formula is working well and we expect this will continue in 2018 and beyond,” White asserts.

To put it bluntly, if Netflix keeps delivering standout and original content to its users that are not accessible anywhere else, White says consumers will remain eager to shell out dollars to use the platform. Especially as unlimited mobile data plans in the U.S. as well as additional areas of the globe crop up, making a comeback, this translates to refreshing new prospects for the video streaming giant. With 5G networks ramping, White makes a bullish call for subscriber gains on back of commercial launches beginning this year, with an even more bolstered build out raring to hit in two years.

Big gains are “still in the cards” for this tech leader, wagers White, who expects a 32% rise in sales to $15.46 billion this year along with a rocket-fire 99% surge in EPS to $2.49 and a 26% increase in total streaming memberships to 148.1 million. Looking ahead to next year, the analyst angles for a 23% jump in sales to $19.06 billion, a 71% upturn in EPS to $4.26, and a 26% vault in total streaming memberships to 186.4 million.

Brian White has earned a strong TipRanks score, boasting a 68% success rate along with a top 100 ranking on the Street: #65 out of 4,767 analysts. Worthy of note, White garners 15.6% in his yearly returns.

TipRanks indicates NFLX has earned some bullish attention on the Street, albeit with some play-it-safe sentiment in the mix. Out of 33 analysts polled in the last 3 months, 20 rate a Buy on the tech stock, 12 maintain a Hold, while 1 issues a Sell. Consider that the consensus average target price stands at $304.52, aligning with where the stock is currently trading today. In other words, these analysts’ expectations are weighed down by caution in the grander scheme.