Analysts at Evercore on Tuesday initiated Netflix Inc. shares with an in-line rating and a $210 12-month price target, which represents a 14% premium to current trading levels. Lead analysts Vijay Jayant and Anthony DiClemente expect Netflix’s total forecasted return to be in line with that of their coverage universe. “Many aspects of the Netflix story are no longer debated,” the two analysts wrote in a note to investors. “The platform has reached near ubiquity with the help of an effective original content strategy, and a global mass market has emerged with streaming becoming the consumer’s preferred way to consume video content. As many of these views have become consensus, our focus in this report is on what we believe to be the key controversies that are central to the story today.” Those key controversies, as laid out by Jayant and DiClemente, are: How big the international opportunity is, the timetable to maturity and its potential profitability; whether U.S. price increases can continue to drive the upside as the market matures; and the two consider Netflix’s valuation to be the elephant in the room. Shares of Netflix are up nearly 49% in the year to date, while the S&P 500 index is up more than 17% and the Dow Jones Industrial Average is up more than 22%.
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