Netflix 'Impervious' To Coronavirus, Recession: Imperial Capital

Despite skepticism over whether Netflix Inc NFLX can sustain the  stellar performance witnessed in the first quarter, one analyst at Imperial Capital is optimistic about continued outperformance.

The Netflix Analyst: David Miller maintained an Outperform rating on Netflix shares and nudged up the price target from $485 to $489. 

The Netflix Thesis: The U.S. still has the dubious distinction of being on top with respect to the number of COVID-19 cases, and the fears surrounding the virus have led to the "cocooning effect," Miller said in a Thursday note. (See his track record here.)

This should boost the subscribership numbers for the company, the analyst said. 

Netflix now operates its platform in every country in the world except Iran, North Korea and China, he said. 

"Not only is NFLX’s service impervious to the effects of the virus, but because the price is so low, it is impervious to any derivative recessionary effects that may arise as a result."

Imperial increased its U.S./Canada domestic second-quarter net adds estimate 500,000 to 550,000; and international net adds from 7 million to 7.4 million, taking Imperial's total net adds estimate to 7.95 million.

Netflix has guided to 7.5 million new global net adds.

Even the revised estimate could prove conservative, Miller said. 

NFLX Price Action: Netflix shares were trading slightly higher at $448.12 at the time of publication Thursday. 

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Photo courtesy of Netflix.