Atlantic Equities: Netflix shares could rise by about 30%

Virtus Investment Partners’ Joe Terranova said last week Netflix Inc (NASDAQ: NFLX) stock was on the verge of breaking above its critical $593 resistance, and it looks like he was right.

Shares of the company jumped 4.0% this morning to $613 after Atlantic Equities reiterated its “overweight” rating on the stock and raised the price target from $690 to $780 (Street High), representing an about 30% upside from here.

Analyst Hamilton Faber raises his outlook on subscriber growth

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According to analyst Hamilton Faber of Atlantic Equities, the streaming giant will have 292 million subscribers in 2024 versus 279 million he had estimated earlier. In 2025, Netflix will hit 311 million subscribers, he added.

“We believe that Netflix subscriber penetration will broadly top out at around 60% in the absence of any more stringent password-sharing clampdown activity,” Faber said.

Much of the subscriber growth, as per Faber, will come from international markets, but the United States will continue to be Netflix’s single-largest source of incremental revenue. He expects the production company’s homeland to make up 23% of its incremental revenue, followed by Japan at 11% and Brazil at 8%.  

KeyBanc’s Patterson also reiterated his “overweight” rating on NFLX

The announcement comes only days after KeyBanc’s Justin Patterson also reiterated his “overweight” rating on Netflix stock with a price target of $645 that translates to about a 3.0% increase from the current per-share price.

Netflix recently committed to releasing 42 original movies by the end of 2021, which could be a major growth driver for the California-based company. Shows like “Money Heist”, Patterson wrote, are wildly popular in the international markets, while “Stranger Things” and “The Witcher” are equally popular in the U.S. as well.

The $270 billion company now has a price to earnings ratio of 63.36.