BARCLAYS: Here are the 4 biggest risks to the Netflix story (NFLX)

markets.businessinsider.com | 7/9/2018 | Staff
lukealukea (Posted by) Level 4
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Netflix has had a big run in 2018, with shares up 116%.

Barclays analyst Ross Sandler raised his price target to $450 a share, citing its ability to win subscribers.

Risks - Netflix - Story

However, he warns there are four risks to the Netflix story.

Watch Netflix trade in real time here.

Investors - Netflix - Year - Argument - Streaming

Investors have been enamored with Netflix this year. But if there's an argument to be made against the streaming giant, Barclays may have it.

"While we remain supportive of the story, we believe it is important to keep some perspective and how variables are shifting," Barclays analyst Ross Sandler wrote in a recent note out to clients.

Netflix - Ballooning - Valuation - Ratio - Part

Netflix's ballooning valuation, which has it at a price-to-earnings ratio of 249.15, is in large part based on one hope investors have for the streaming-giant: international expansion. Netflix has conquered the US market for entertainment streaming, and has already gained an impressive foothold internationally.That strength has been a driving force for Netflix shares, which are up more than 116% this year.

Netflix's first-quarter earnings report in April showed it gained 5.46 million new international subscribers, beating the Wall Street estimate of 4.98 million subs. And Goldman Sachs analyst Heath Terry believes the streaming giant will add 34 million international subscribers in all of 2019.

Sandler - Price - Target - Share - %

Sandler raised his price target to $450 a share, roughly 8% above where Netflix is currently trading, because of his confidence in Netflix's ability to accrue subscribers.

"If one were to value Netflix on a per subscription basis, valuation would not only have a stronger anchor but also be comparable to other media businesses," he said....
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