10-6-17 7:27 AM EDT | Email Article

Shares of streaming giant Netflix Inc. (NFLX) were slightly higher Friday, after Wedbush raised its price target on the stock to $88 from $82, but reiterated an underperform rating, saying it still expects the company to burn cash to fund content acquisition. Netflix has said it plans to spend $7 billion on content in 2018, after spending $6 billion this year. On Thursday, the company announced it would raise monthly subscription prices for standard and premium plans in the U.S. starting next month. "International profits may remain elusive due to competition for content and subs, and the price increase is likely to cause a deceleration in domestic growth," analysts led by Michael Pachter wrote in a note. "Negative free cash flow makes discounted cash flow valuation impossible." Wedbush raised its revenue estimates to reflect the price change, and said it expects top-line growth to be absorbed by higher cost of revenue. Shares have gained 57% in 2017, while the S&P 500 has gained 14%.

-Ciara Linnane; 415-439-6400; AskNewswires@dowjones.com


(END) Dow Jones Newswires

10-06-17 0727ET

Copyright (c) 2017 Dow Jones & Company, Inc.
Copyright 2017 MarketWatch
Add a Comment
If you have questions or comments about this topic, check out our message boards.
Sponsored Links
Buy a Link Now
Sponsor Center
Content Partners