Netflix shares in Wall Street do not seem to be affected by the merger between AT&T and Time Warner, the telecommunications giant that will revolutionize the competitive scenario of online film distribution, TV series, and other entertainment content.
Goldman Sachs analysts are very optimistic about Reed Hastings’ company, and despite the strong gains made by the title since the beginning of the year (+ 94%) and in the last 12 months (+ 144%), they have raised to $490 their price target. That would translate into a further 35% increase to Netflix stock price. As analyst Heath Terry affirmed, “we believe the growing content offering and expanding distribution ecosystem will continue to drive subscriber growth above consensus expectations. Based on the pace of both, we’re raising our revenue estimates and price target.”
Goldman Sachs expects Netflix to get 32.5 million subscribers in 2019 ahead of the consensus 26 million estimates. As for Netflix’s intention to spend $2 billion on marketing in the current fiscal year, Goldman Sachs wrote in his report: “We believe Netflix’s ability to spend significantly more on customer acquisition while still producing ~4pps of operating margin expansion for the full year, on our estimates, will allow the company to drive additional subscriber growth.”
