Netflix Inc.’s 12-month price target was increased to $245 from $230 at MKM Partners on Thursday. MKM analyst Rob Sanderson raised his subscriber outlook for Netflix for 2018, saying the company has yet to reach its peak year for total subscriber additions. “We continue to view Netflix as the large cap with the most potential for market cap appreciation over the next three to four years,” Sanderson wrote in a note to investors. Sanderson said he expects Netflix to add 20.6 million subscribers next year, which is roughly in line with FactSet consensus of 20.9 million, but would be down from 2017 consensus of 22.0 million subscriber additions. This year was expected to be the streaming service’s peak for subscriber additions, but Sanderson said it’s more likely to come in 2019 or 2020. “We think Netflix has a large first mover advantage, expecting to spend $7 billion to $8 billion next year, far more than any other programmer,” Sanderson wrote. “A larger budget means more content and a better value proposition, which in turn means more subscribers.” Shares of Netflix were up 1% in premarket trade, and have gained 52% in the year to date. By comparison, the S&P 500 index is up more than 17% and the Dow Jones Industrial Average is up more than 21%.
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