Analyst Ups Netflix Stock Price Target 45%22 Jun, 2015 By: Erik Gruenwedel
Netflix share price projection could reach $950
BTIG Research analyst Richard Greenfield has long sung praises on Netflix’s meteoric rise and burgeoning impact on the TV landscape. The analyst, who was the first to project Netflix would top 100 million subscribers, June 22 upped by 45% his one-year price target for the subscription streaming pioneer to $950 per share.
“We believe [Netflix’s] business model is gaining meaningful momentum,” Greenfield wrote in a blog post.
Specifically, the analyst feels the traditional linear TV ecosystem is on the run as it grapples with a changing TV viewer increasingly unwilling to settle for pricey channel bundles, increased ad spots and limited choice in content selection.
With Netflix streaming topping two hours per subscriber per day in the United States, the SVOD service’s clout is undeniable. Just this year, HBO, Sony, Dish Network and CBS have launched standalone over-the-top video services aimed at consumers that have cut ties with or eschewed the pay-TV bundle.
Greenfield projects Netflix will top 60 million domestic subscribers within five years, and could reach 140 million globally as well.
“The power of Netflix goes beyond subscriber growth,” he wrote.
At the same time, the analyst contends risks to the Netflix bandwagon aren’t shrinking. In addition to aforementioned OTT video competitors, Greenfield said stricter data caps, increased peering agreements with ISPs and escalating costs associated with third-party content licensing pose risks to Netflix’s elevated price target.
“While we have seen the entire industry turn into a willing content seller to Netflix, any change in content creators’ desire to license content to Netflix would be problematic, at least until Netflix has proved its ability to create a regular stream of successful original programming,” Greenfield wrote.