Netflix Doing OK Despite Price Hikes, Analyst Has Reservations About OpenTable (NFLX, OPEN, AMZN, PCLN, LNKD, BIDU)
Shares of Netflix (NFLX), the provider of streaming online movie services and DVD rentals by mail, are up 3% and soaring to new all-time highs today despite raising prices for its services, a move some fear will create customer backlash. Backlash or not, the Dotcom Stocks Index is soaring 2.9% today.
Analysts are mixed on the Netflix decision to raise prices. Goldman Sachs reiterated a “buy” rating and $330 price target on the stock, saying a 5% jump in streaming only subscribers could boost revenue per subscriber to $11.96, ensuring Netflix could withstand an 18% churn rate. Piper Jaffray reiterated an “overweight” rating on the stock while raising its price target to $330 from $305, saying average revenue per subscriber could rise to $12 per month in September from $11.27 per month in the first half of the year.
Jefferies and Lazard Capital Markets don’t seem impressed as both reiterated “hold” ratings on the stock. Jefferies has a $240 price target on Netflix, which is well below where the shares currently trade. BMO Capital Markets reiterated a tepid “market perform” rating on the stock, but did raise its price target to $280 from $210, but that is also below where Netflix trades today.
Speaking of less-than-stellar analyst commentary, shares of online restaurant reservations provider Opentable (OPEN) are down fractionally after Benchmark pared its second-quarter revenue estimate on the company, citing increased competition and weakness in OpenTable’s deals product, Spotlight. The research firm reiterated a “hold” rating and $90 price target on the shares, which is above where OpenTable currently trades.
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