Netflix Could Benefit From Blockbuster Changes11 Apr, 2007 By: Jessica Wolf
Netflix could get a boost from changes at Blockbuster, comprising the departure of CEO John Antioco and a potential Total Access rate hike, according to an analyst report.
Lehman Brothers analyst Doug Anmuth raised his price target on Netflix April 10 by $1 to $30, based on positive share growth activity around the online rentailer over the last several weeks, and the fact that Blockbuster is likely to raise its online rental pricing soon. Netflix also could benefit from a better operating environment in the wake of Antioco's departure, he wrote.
In a note to clients released Tuesday April 10, Anmuth said Netflix is likely to report better-than-expected first quarter earnings when the company releases results April 23. The analyst also surmised, according to reports, that online renters who may have defected from Netflix to take advantage of Blockbuster's competitive Total Access plan, are heavy renters who drive limited profit.
Neflix shares were boosted a bit the day the analyst note went out, increasing 2.4% to $24.93 on the Nasdaq. By close of market the following day, however, Netflix dipped 1.05% to $24.60.