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Netflix Stock Surges Ahead Of Q1 Earnings Report Next Week

Netflix ( NFLX ) stock surged on Wednesday after a series of positive analyst reports on the Internet TV service ahead of the company’s first-quarter earnings report, scheduled for Monday after the market close. Netflix jumped as much as 4% in morning trading Wednesday. In afternoon trading on the stock market today , Netflix shares were up 1.5%, near 109. On Tuesday, Netflix stock rose 4.2% and retook its critical 200-day line. Shares are up more than 35% since early February. BTIG analyst Richard Greenfield on Wednesday reiterated his buy rating on Netflix stock and raised his 12-month price target to 150 from 136. He also raised his Netflix subscriber growth forecasts and reduced his expectations for international losses. “We believe the cadence and consumer appeal of Netflix’s original/licensed content is leading to greater than expected global net subscriber additions,” Greenfield said in a research report. “The combination of a global shift to on-demand streaming video, an increasingly diverse slate of programming that appeals to all members of a household and best-in-class technology is propelling Netflix’s gross subscriber adds and reducing churn.” Greenfield is now forecasting Netflix to have 127 million global subscribers by the end of 2018 and, conservatively, 150 million by 2020. And those forecasts don’t include Netflix entering China, he said. Netflix ended 2015 with 74.76 million subscribers worldwide. Netflix Tops HBO In Consumer Survey In survey results released Monday by Morgan Stanley, consumers ranked Netflix as No. 1 for original programming, putting it above Time Warner ( TWX )-owned HBO for the first time in the six years it’s tracked consumer preferences in video services. Some 29% of survey respondents said Netflix was best in original programming, up from 23% last year, while HBO came in second place at 18% (compared with 31% last year), Morgan Stanley said. Amazon.com ( AMZN ), Hulu and CBS ( CBS )-owned Showtime were each near 5%. Late Tuesday, Piper Jaffray analyst Michael Olson reiterated his overweight rating on Netflix stock, with a price target of 122. Piper’s spring survey of U.S. teenagers found that Netflix holds a massive lead in video services among young consumers. Netflix has a 64% usage share among teens, well ahead of competing services from Amazon and Hulu at 4% and 3%, respectively. But not all Wall Street analysts are sold on Netflix. Wedbush analyst Michael Pachter on Wednesday maintained his underperform rating on Netflix stock with a 12-month price target of 45. Pachter expects solid Q1 results but says Netflix will see high subscriber churn in the U.S. in Q2 and Q3 as it institutes staggered price increases for longtime users. Dougherty analyst Steven Frankel reiterated his neutral rating on Netflix stock on Tuesday. Netflix’s “path to respectable profitability remains difficult to determine,” Frankel said. The company is spending aggressively on original content and international expansion, but needs to prove that it can ramp up profits to justify its valuation, he said.

New Amazon.com Kindle E-Reader Is Smallest, Lightest Yet

After leaked images and details of the new Amazon.com ( AMZN ) e-reader — which largely proved true — the company announced the official details Wednesday. The new Kindle, called Oasis, is the most expensive, smallest and lightest offering to date. Available for preorder Wednesday at $289.99, the Oasis is 30% thinner and more than 20% lighter than the other Kindles, according to Amazon’s press release . Oasis weighs just 4.6 ounces, and it measures 3.4 millimeters — just more than a 10th of an inch — at its thinnest point. Amazon stock was up 1.5%, near 613, in midday trading on the stock market today . Amazon has an IBD Composite Rating of 78, where 99 is the highest. Shares broke out of a cup-with-handle base with a 603.34 buy point, in high volume. In its release, Amazon touted the two-battery design that the company claims will extend the battery life for “months.” The cheapest Kindle starts at $79.99 but lacks the high-resolution display and other features of the more expensive models, such as the Paperwhite — $119.99 — or the Voyage, which costs $199.99. Amazon does not break out Kindle sales. The Associated Press , citing the Association of American Publishers, reported that overall e-reader sales rose 3.8% in 2014 to $3.37 billion. Seattle-based Amazon’s content distribution — it also live streams video like Netflix ( NFLX ) does, for example — sets it apart from e-commerce players such as eBay ( EBAY ) and Wal-Mart ( WMT ).

Why You Should Be Paying Attention To Netflix’s Stock Chart

Loading the player… Get ready to grab your popcorn — we’re now less than a week away from Netflix ’s ( NFLX ) Q1 earnings report next Monday, April 18. In Tuesday’s session, the stock was able to retake a critical level — the 200-day line — that it has been struggling to recapture. Can it hold above that level Wednesday? Global Rollout Impacts Financials The video-streaming powerhouse’s bottom line is projected to drop 73% to three cents a share as amid rising costs for its global rollout. Netflix hasn’t seen that large an earnings decline since Q4 2012. Analysts expect revenue for the quarter to jump 25% to $1.97 billion, which would be Netflix’s fastest growth in the last four quarters. All Eyes On Subscriber Growth And maybe even more so than those figures, Wall Street will be looking closely at subscriber growth — a key metric for Netflix. In Q4, Netflix’s earnings and revenue beat estimates. So did its overall subscriber additions of 5.6 million, boosted by international markets. But its U.S. subscriber additions of 1.56 million missed expectations for 1.65 million new subscribers. The miss represented a slowdown in U.S. growth and sent shares tumbling over the next several weeks. Netflix may be able to redeem itself. A Baird survey out late last month points to “solid” U.S. additions in Q1, fueled by the recent launches of new seasons of original shows like “House of Cards” and “Daredevil.” Netflix itself has projected 6.1 million net additions for Q1 vs. 4.9 million a year earlier. Stock Retakes Key 200-Day Line Look for positive results to be a catalyst for the stock, which is currently trading 20% below its all-time high, reached in early December. Netflix has struggled to retake the 200-day line but finally climbed above that level Tuesday as it rallied 4.2%. Shares have risen more than 30% from their February low, hit in the wake of Netflix’s last quarterly report. Netflix Originals Seen As No. 1 In May, “grandfathered-in” subscribers will see a $2 price increase to $9.99 a month. One analyst sees the price increase creating a churn of just 3% to 4%, which is relatively low. One big reason why cord cutters may be unlikely to cut their Netflix subscriptions is the content. Morgan Stanley says that Netflix’s original content is now No. 1, putting it above Time Warner ( TWX )-owned HBO for the first time in the six years that Morgan Stanley has been tracking the video services. Still, the company faces stiff competition from a growing list of competitors besides HBO, including Hulu — co-owned by Walt Disney ( DIS ), 21st Century Fox ( FOXA ) and Comcast ( CMCSA ) — and Amazon ( AMZN ) Video. Will Disney Acquire Netflix? Netflix’s leadership in video streaming could make it a good acquisition target for Disney — or so said BTIG analyst Rich Greenfield in a report last week. He says that the buy would help the House of Mouse with succession planning and the erosion of its ABC and ESPN broadcast businesses. But whether or not Disney is actually interested in the move remains to be seen. Image provided by Shutterstock .