Netflix Looks To Keep Its 'Crown' As King Of Content

Netflix, Inc. NFLX is likely to benefit from the debut of the long-awaited second season of "The Crown" Friday, staying on track to retain its leadership position this weekend, Loop Capital Markets said in a Tuesday note.

The Analyst

Loop Capital Markets analyst David Miller retained a Buy rating on the shares of Netflix with a $237 price target.

The Thesis

Going by the stock reaction to the first season of "The Crown" on Nov. 4, 2016, which helped the company handily beat consensus expectation for subscribers in the fourth quarter of 2016, Miller said he expects the same pattern to play out now. (See Miller's track record here.) 

"The next one to two weeks' worth of trading sessions should be very interesting, and likely rewarding, for long investors of NFLX ... " 

Trade reports have said Netflix may have spent $115 million on the next 10 episodes of the biographical British monarchy drama, according to Loop Capital. The series is set for 60 episodes over six seasons. 

Loop raised its net domestic subscriber estimate for the fourth quarter from 1.25 million to 1.29 million and its Netflix international subscriber count estimate from 5.05 million to 5.15 million. The firm also raised its fourth quarter revenue estimate from $3.27 billion tom $3.29 billion, cumulative EBIT estimate from $238.7 million to $249.2 million and EPS estimate from 42 cents to 44 cents.

Consensus estimates for Netflix call for earnings of 42 cents per share on revenues of $3.27 billion.

The Price Action

Netflix shares have added over 50 percent year-to-date. 

Netflix closed Wednesday up 0.59 percent at $185.30. 

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