Jefferies Ramps Up Netflix’s PT On Price Hike Bet


Jefferies lifted the price target on Netflix stock to $570 (16.2% upside potential) from $550, citing the potential of near-term price hikes in international markets. The analyst maintained a Buy rating on the stock.

Jefferies analyst Alex Giaimo said “We have confidence that NFLX can raise prices in int’l markets given its deepening content library and outsized consumer value proposition.” The analyst pointed out that the company’s language during its 2Q earnings conference call was open-ended and hinted of a probable hike in prices in the near to mid-term.

According to Giaimo, a price hike of $1 to $2 in either the US and Canada or in the EMEA (Europe, the Middle East and Africa) region could boost Netflix’s (NFLX) FY21 revenue by $500 million to $1 billion.

In July, the streaming giant Netflix reported 2Q earnings per share of $1.59, missing analysts’ expectations of $1.81 per share. However, its revenues of $6.15 billion beat the Street consensus of $6.08 billion. Netflix added 10.09 million global subscribers in 2Q versus analysts’ expectations of 8.26 million. (See NFLX stock analysis on TipRanks)

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 21 Buys, 9 Holds and 5 Sells. The average price target of $524.60 implies upside potential of about 6.9% to current levels. Shares have increased about 51.6% year-to-date.

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