Goldman Sachs Suggests Buying Calls on Netflix (NFLX)

Goldman Sachs is out with a research note this morning, where it suggests that traders buy calls on Netflix, Inc. NFLX to position for a rebound in growth expectations.

The Goldman Sachs Internet analyst, Ingrid Chung, recently upgraded NFLX to Buy and sees 50% upside to her $300 12-month price target. She noted that NFLX benefits from strong growth in on-line video, driven by the penetration of connected devices.

She points to a data point from the GS Internet Usage Survey, which shows that 27% of US consumers now streaming TV/movies, which is up from 16% last year as supportive of a key inflection point in NFLX's subscriber momentum.

Goldman suggests buying the September $245 call for $14.00.

Netflix, Inc. is a subscription service streaming movies and television episodes over the Internet and sending digital versatile discs by mail to more than 12 million subscribers. The company's subscribers can watch unlimited movies and television episodes streamed to their televisions and computers, and can receive DVDs delivered to their homes.