Baird Gets Even More Bullish on Netflix

Netflix Inc. (NFLX) is on track to report substantial membership growth for the second quarter, according to Baird Equity Research, which cited its latest consumer survey.

Baird increased its price target on Netflix to $390 per share from $300 based on the survey results showing that subscriber growth will likely top Street expectations. The survey of 3,000 U.S. consumers showed that Netflix’s new original content drove subscription memberships recently. That includes the streaming service’s latest popular teen drama “13 Reasons Why.”

Baird, which has a neutral rating on the stock, expects Netflix to add 1.2 million domestic subscribers in the June quarter.

'Solid' Survey Results

"Our quarterly U.S. subscriber survey suggests solid Q2 growth, seemingly confirming Street expectations. Our international checks also suggest another strong quarter," wrote Baird analyst William Power in a note. “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.”

Still, Power does foresee ongoing competitive challenges for Netflix from technology giants like Apple Inc. (AAPL), Inc. (AMZN) and Google Inc. (GOOGL), among others.

“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 Has More Wall Street Backing

In other recent analyst actions on Netflix, Bank of America Merrill Lynch has also said its sees more upside in Netflix based on subscriber growth potential. The firm raised its price target to $460 from $352. (See also: Bank of America Sees More Upside for Netflix.)

Netflix shares are trading near $391 and are up 160.6% in the past year. The stock is up 316.2% in the past three years. In the past month alone, Netflix stock has risen 8.2%.

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