Netflix Inc (NFLX)

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Here’s the No. 1 reason investors should still scoop up Netflix’s stock
By: MarketWatch | January 18, 2019

Critical information for the U.S. trading day

Where there’s smoke, there’s fire.

At least that’s the hope after a WSJ report on Thursday said the U.S. may ease China tariffs to facilitate a trade deal.

“Although, the Treasury didn’t confirm this...the market has bought this for now and if this turns out to be a junk, the selloff would be intense,” Naeem Aslam, chief market analyst at Think Markets UK, tells clients in a note.

And of course, one tweet from you-know-who (President Donald Trump) could also spoil the mood ahead of the long weekend, that will see U.S. markets shut Monday for the Martin Luther King Jr. holiday. On that note, it’s worth checking out the Heisenberg Report, which says POTUS, after pushing the Fed to sing like a dove, is boxed in a corner when it comes to the stock rally he so badly wants.

“If he wants the fledgling stock surge to be some semblance of sustainable, he needs to either end the shutdown, strike a trade deal or, preferably, both,” said The Real Heisenberg.

You’d think earnings releases were a sideshow these days, though some bad news from Tesla this morning is definitely garnering attention (see Buzz). Our call of the day from analysts at Piper Jaffray looks at an important big name that reported late Thursday— Netflix — and they say the latest results reveal the huge feather in the cap of the video streamer and point to a prime reason to own its shares.

“The single most important metric to investors...is international subscriber additions and that was ahead of expectations for the quarter and the guide,” said analysts Michael Olson and Yung Kim.

While domestic subscriber numbers slightly missed the market at 1.53 million, on the international side, that number jumped to 7.3 million, well above the Street’s forecast of 6.13 million. For the first quarter of 2019, Netflix expects 7.3 million adds again on that international side. In other words, global domination, and while Netflix shares look set to take a hit Friday over some revenue and margin disappointment, Piper Jaffray has set a new price target at $440 (from $430), which makes the current $353 a bit of a bargain.

As for latest price hikes, which had some fans fuming, Piper Jaffray says its own research finds go to $15.50/mo without balking.

“There has been a change, in my opinion, in the perception of Netflix among investors. No longer is the company a startup looking to disrupt the current media sector. It’s already done this,” added Jordan Hiscott, chief trader at Ayondo Markets, who sees Netflix hitting $423 by summer.

Obviously, Netflix has a lot of pull on direction where the larger market is concerned, and that’s maybe a case of watch this space. “We think a solid result and follow-through for NFLX shares will be important for risk appetite in general, which has started the year on an upswing,” said Rob Sanderson, managing director at MKM Partners, in a note to clients ahead of those results.

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