Netflix (NFLX) shares rose to a new record on Friday as Oppenheimer raised the price target on the stock to $215 from $200 after the company announced a forthcoming pricing increase to its monthly plans.
NFLX was up 0.5% recently, trading in a new 52-week range between $97.63 and $195.74.
“We estimate the $1 increase to the standard tier and $2 increase to premium plans will result in 10% higher [average selling price] and 4% higher ’18 and ’19 US revenue,” Oppenheimer said. “While this should add to the bottom line, we believe the increased profitability in the US will go to funding international content.”
The broker said that as a result, its 2018 and 2019 US EBIT estimates increase by 7% and 6%, respectively, offset by $145 million and $150 million reductions to international EBIT, which result in overall EBIT and earnings per share being unchanged.
Oppenheimer retained an outperform rating on the stock.