(News Bulletin 247) – Wells Fargo on Thursday maintained its ‘overweight’ recommendation and its price target of $400 on Netflix, believing that the group’s efforts to combat code sharing should support its results.
According to the analyst, the stock’s recent ‘rally’ – which jumped 10% in less than a week while the S&P 500 only recovered 3% – can be explained by the market’s optimism concerning the effects of its new subscription formulas.
‘Despite all the talk that in ad-supported video on demand (AVOD), account sharing is the biggest short-term opportunity, with 100 million shared accounts in total, including 30 million just for the American market,” he continues.
Regarding the latter, subscribers in the United States will be charged eight dollars a month to add additional members to their account, explains the intermediary.
If some will refuse, this choice will also result in the arrival of new subscribers who have benefited so far from code sharing, he predicts in a research note.
Assuming that the group’s results will improve, the title could reach at least 430 dollars on the basis of its current valuation multiples, estimates Wells Fargo, which adds that the price could even touch 560 dollars within the framework of an ‘ideal’ scenario.
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