Consumers Love Netflix 'More Than TV;' Analyst Upgrades, Boosts Price Target By $500

In a report published Thursday, analysts at FBR & Co upgraded Netflix, Inc NFLX to Outperform, while raising the price target from $400 to $900. A recent survey shows that domestic consumers prefer Netflix to television. A proprietary survery, conducted by FBR, in collaboration with ClearVoice Research, LLC, in early April, revealed that almost 40% US TV households are Netflix subscribers, most of whom prefer Netflix to television. The survey results are in agreement with the 1Q earnings results reported by the company after market close on Wednesday, April 15. "In this outpouring of affection, we see Netflix as very likely to move towards 180 million global subscribers by 2020 (over 60 million in the U.S.) and, over time, enjoy mid-single-digit-plus ARPU growth," the analysts said. In 1Q15, Netflix reported the addition of a total of 4.88 million new streaming subscriptions, of which 2.2 million were US based. This was 21 percent above the guidance, pointing towards net additions of 5.6 million US subscribers in 2015 and more than 10 million worldwide. The company plans to undertaken a major market expansion during 2H, which should drive these net adds.