Netflix will report strong membership growth for its second quarter, according to Baird Equity Research.
The firm raised it price target for Netflix shares to $390 from $300. Baird cited its consumer survey, which showed the video streaming company will likely meet the Wall Street subscriber consensus forecast for the June quarter.
“Our quarterly U.S. subscriber survey suggests solid Q2 growth, seemingly confirming Street expectations. Our international checks also suggest another strong quarter,” analyst William Power said in a note to clients entitled “13 Reasons Why Quarter Should Be Solid Again” Monday. “Survey results and Google trend analysis suggest solid results, and given the long runway and increasing focus on local content, we expect continued solid results.”
Baird’s quarterly survey of 3,000 U.S. consumers revealed Netflix’s original content released in the second quarter, including the second season of teen drama “13 Reasons Why,” drove subscriber additions.
The analyst estimates the company will add 1.2 million domestic and 5 million international subscribers in the June quarter, matching Wall Street consensus estimates.
Power maintained his neutral rating for Netflix shares due to the potential threat from large technology companies.
“We remain concerned with the free cash flow losses, and potential for increased competition long term from Amazon, Apple and others, but expect strong subscriber growth to continue to support the shares,” he said.
Netflix is scheduled to announce second-quarter financial results on July 16. The company’s shares are up 104 percent so far this year through Friday. It is the second best-performing stock in the S&P 500.