April 22 (Reuters) - 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 stock.
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 note.
“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 Nasdaq. (Reporting by Soham Chatterjee; Editing by Saumyadeb Chakrabarty)