Despite increasing competition in the streaming video market, Netflix (NFLX) is widening its “competitive moat” through a strong brand, original content and international expansion, a Wall Street analyst said Thursday.
X GBH Insights analyst Daniel Ives reiterated his “highly attractive” rating on Netflix stock and raised his price target to 310 from 255 to reflect stronger-than-expected subscriber additions and international momentum for the rest of the year.
Netflix shares were up 2.5%, near 272.70, in morning trading on the stock market today. Netflix is looking for a fourth straight advance as it consolidates below its Jan. 29 all-time high of 286.81.
“Our bullish thesis on Netflix is based on our belief that the company’s competitive moat, franchise appeal, ability to increase international streaming customers through 2020, and original content buildout will translate into robust profitability and growth as the next phase of this story plays out over the coming year,” Ives said in a report to clients.
Netflix is aggressively purchasing original content and locking up talent, such as its deal this week with prolific producer Ryan Murphy, Ives said. It wants to solidify its lead ahead of the launch of Walt Disney‘s (DIS) streaming service next year, he said.
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“With more consumer dollars shifting away from traditional cable with cord cutting and towards streaming delivery,” Ives said, “we believe Netflix has a long runway of growth and opportunity ahead of itself and clear first mover advantage despite intense competition from larger media players (Disney), pure play competitors, and new potential entrants (e.g. Apple (AAPL)).”
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