Netflix seen replicating U.S. success overseas (Investor's Business Daily)


August 4, 2015



By PATRICK SEITZ  
INVESTOR’S BUSINESS DAILY

Angelina Jolie introduces the trailer for her film “Unbroken” during a Universal Pictures studio presentation at CinemaCon 2014 on March 25, 2014, in… View Enlarged Image

Netflix (NASDAQ:NFLX) stock surged to a record high on Tuesday after getting a bullish report from Guggenheim Securities. Guggenheim analyst Michael Morris initiated coverage of Netflix with a buy rating and price target of 160. In afternoon trading in the stock market today, Netflix was up more than 8% near 122.

“Netflix is based on a sound concept: Utilize improvements in technology to better entertain consumers in an efficient manner at an attractive price,” Morris said in a report.

Netflix is the U.S. leader in on-demand Internet television and is replicating that success in international markets, Morris said.

The company is strengthening its position in the market by adding unique, original content, Morris said.

Netflix is in investment mode and looks expensive using traditional metrics, he said. But once Netflix completes its global rollout by the end of next year, it can focus on ramping up its profitability.

Netflix has a reputation for being friendly to creative talent and has been attracting Hollywood stars for original movies and TV shows, Morris said.

For instance, last month Netflix signed Angelina Jolie to direct an adaptation of “First They Killed My Father: A Daughter of Cambodia Remembers,” a memoir from Cambodian author and human rights activist Loung Ung about surviving the deadly Khmer Rouge regime.

In June, it signed her husband Brad Pitt to star in and produce “War Machine,” a satirical comedy film based on the best-selling book “The Operators: The Wild and Terrifying Inside Story of America’s War in Afghanistan” by Michael Hastings.

Netflix’s lineup of original TV series includes “House of Cards,” “Orange Is the New Black,” “Marvel’s Daredevil,” “Unbreakable Kimmy Schmidt” and “Wet Hot American Summer: First Day of Camp.”

Rivals such as Amazon.com (NASDAQ:AMZN) and Hulu also are ramping up their spending on original content.

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