Netflix To Benefit From Narcos Hit: UBS

UBS says that response from new market launches have been strong for Netflix.

Based on Evidence Lab research, analysts at UBS pointed out that Netflix, Inc. has witnessed a weak introduction in Japan, while New Zealand and Australia reported a strong show. They highlighted Japan remains the top launch market until now, and expect that it will add 14,000 subscribers in FY15Q3.

The analysts focused that the New Zealand and Australia’s responses are still strong in the current quarter, due to Netflix app downloads. The streaming giant plans to increase its operations to more than 200 countries by the end of the following year. UBS noted that Netflix has announced it will introduce its offerings in Taiwan, Singapore, South Korea, and Hong Kong in January 2016. These countries contain advanced technologies for credit or debit card penetration and for broadband penetration, as per the firm.

UBS reiterated a rating of Buy along with a price target of $143 on Netflix stock. The Street is bullish on Netflix stock as specified by a Bloomberg poll recently, 23 analysts rated the stock as Buy, and 16 gave it a Hold, while only six suggest a Sell rating.

Analysts at UBS expect more launches next year to meet the aim of the management of global coverage by the fall of 2016. Moreover, they think that in spite of competition worries in the United States lately, the competitive atmosphere is stable. The analysts pointed out that the streaming giant enjoys various advantages like brand, technology expertise, global leadership, marketing prowess, content creation capabilities and entire emphasize on internet-based ad-free subscription videos. They also said, “Further, online video is not a zero sum game, and, while we expect Netflix to lead, it does not need to dominate to create meaningful value given the likely ultimate market size.”

The firm highlighted that Narcos – a TV series seems to be a hit for the company. It noted that Narcos was premiered on August 28 last year, and in a month, it was amongst the top most liked original shows of Netflix on Facebook. The analysts added that the reception of the show has been better in Latin America. They said, “Overall, this increases our confidence in 3Q15 subscriber growth estimates for both the U.S. and international markets. Further, we expect continued original content momentum in 4Q (Marvel's Jessica Jones vs. Marco Polo).”

Netflix stock news shows that the stock was up 4.97% to $103.24 on Wednesday, when the market closed, which is positive for the company.