Netflix stock gets a new Street-high price target of $500

BMO Capital Markets analyst Daniel Salmon raised his price target on Netflix Inc.'s stock to $500 from $450 Friday, with his new target now the highest among analysts tracked by FactSet. "We believe the company has both plenty of liquidity in the short-term, but also the benefit of rising revenue and falling cash costs as live production remains at a standstill," Salmon wrote in a note to clients. He raised his 2020 free-cash-flow estimates based on the expectation for reduced content spending but lowered his 2021 estimates for the metric on the assumption that much production will pick up then. "But 2022-2030 FCF rises as we believe accelerating changes to the ecosystem will help rationalize content spending sooner (winners win earlier)." The price-target change comes as Netflix is due to report first-quarter earnings Tuesday afternoon. Shares are off 4.4% in Friday trading after Benchmark Research initiated coverage of the stock at sell, arguing that newly furloughed or laid-off workers could view Netflix as an easy cost to cut during uncertain economic times. The stock has increased 23% over the past three months as the S&P 500 Read More...