After surveying nearly 1,000 internet households in seven international markets that had Netflix available for four years on average, Piper Jaffray analyst Michael Olson has increased confidence in the company's ability to achieve his estimate for 12.5% international internet household penetration by 2020. 37% of respondents indicated that they are currently Netflix subscribers, with another 13% indicating that they are not on Netflix today, but expect to be within the next six months, Olson tells investors in a research note.
The survey indicated that 50% of internet households in the seven countries -- U.K., Germany, Brazil, Mexico, Australia, Spain, and France -- are either currently Netflix subscribers or plan to be later this year, the analyst adds. He believes the current 35 times valuation multiple on Netflix shares is reasonable given recent subscriber trends and his expectation for 60% earnings growth in 2020.
Olson maintains an Overweight rating on Netflix with a $166 price target. The streaming service closed yesterday down $1.42 to $145.50.
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