JP Morgan Comments on Netflix 2Q Results

J.P. Morgan has published a research report on Netflix NFLX commenting on 2Q results. In the report, J.P. Morgan wrote, "Netflix's combined 2Q results and outlook for 3Q were light as 2Q subs came in below optimistic expectations and sub growth in 3Q will be hindered by the recently announced pricing changes. We recognize that Netflix shares could have some nearterm dislocation, but we remain positive on the shares and believe this will prove to be an attractive entry point longer-term. EPS beats, but subscriber growth slightly below expectations. 2Q total subs of 25.6 million (+70% Y/Y) were roughly in line with our projection, but below broader expectations north of 26 million. GAAP EPS of $1.26 was well above our/consensus of $1.17/$1.12 as Netflix spent less than anticipated on streaming content (despite still large sequential increases) and shipped fewer DVDs during the quarter. Though the company did beat on EPS—and the pricing changes suggest higher long-term operating profit—Netflix is a growth story and the focus will remain on subscribers in the near-term." J.P. Morgan rated Netflix an Overweight with a price target of $340.00. Netflix closed Monday at $281.53.