April 22 Netflix Inc's planned price
hikes will allow it to spend more to produce more original
content that will help it attract more customers globally,
analysts said, as many of them raised their price targets on the
Netflix's shares rose more than 9 percent in early trading
on Tuesday after the company unveiled plans to increase prices
and reported a better-than-expected quarterly profit.
At least seven brokerages raised their price targets on the
stock. Raymond James and Cantor Fitzgerald upgraded the stock to
their equivalent of a "buy" rating, citing strong growth
prospects from international markets.
Analysts said Netflix has sufficient room to raise monthly
subscriptions for new subscribers by $1-$2 in some countries.
"This dramatically increases our revenue and profit
estimates from current markets over the next three years,"
Pacific Crest Securities analyst Andy Hargreaves wrote in a
"Further, it seems highly likely that Netflix will
accelerate international expansion beginning in the second half
of 2014, which should expand the company's TAM (total
addressable market) and allow it to drive meaningful upside to
long-term profit expectations."
Netflix shares, which have more than doubled in the past
year, were trading at $380.44 just after the opening on the
(Reporting by Soham Chatterjee; Editing by Saumyadeb