UPDATE: J.P. Morgan Raises Estimates and PT on Netflix Ahead of 3Q Earnings Report

In a report published Monday on Internet Sectors, J.P. Morgan analyst Doug Anmuth raised the PT on Netflix NFLX subscriber, revenue and EBITDA estimates which resulted in a higher year end PT from $290 to $340. J.P. Morgan raised 2015 US streaming subscriber estimates as Netflix continues to build strong brands, noting the viewership around Orange Is The New Black, and strong consumer awareness around the final season of Breaking Bad . Anmuth commented, “Sentiment in shares has been positive given increasing content leverage toward Netflix through originals and recent deals (Weinstein Pay TV deal), increased optimism around a price increase in 2014 or 2015, and recent partnerships with MSOs in the UK (Virgin Media) and Sweden (Com Hem) to integrate the Netflix app into the cable user interface on TiVo set-top boxes.” The analyst noted expected strong 3Q US streaming net adds with the increase of subscriber momentum continuing into 2014. J.P. Morgan also saw Netflix's huge content selection appealing to a wider audience and raised 2015 US streaming subscriber, revenue and EBITDA estimates. J.P. Morgan reported positive estimates for the third quarter with US streaming subs as the primary focus. The analyst models US streaming subs of $31M above guidance of $30.5-31.3M and 3Q revenue of $1.106B ahead of consensus of $1.099B. Anmuth stated US and international streaming revenue at $878.2M (previous guidance of $863-885M), and GAAP ESP estimate if $0.42 (previous guidance of $0.30-0.56). J.P. Morgan commented, “Note that the company no longer provides subs and revenue guidance for the domestic DVD segment, which we expect to drive $227.5M in revenue.” Anmuth conclude that Netflix “benefits from improving content, mobile accessibility, and positive seasonality.” 4Q revenue model is reported at $1.156B with EPS of $0.47. Netflix's 3Q13 earning will be reported on Monday, October 21 and the 5pm ET Q&A video webcast will be available at http://ir.netflix.com. Netflix closed at $303.99 on Friday and is currently trading +2.25 percent.