Netflix's stock surges after analyst provides bullish outlook

Netflix Inc.'s stock surged 5.1% in morning trade Friday, putting it on track for a fourth-straight gain, after Canaccord Genuity said it was bullish on the streaming service's longer-term prospects. Analyst Michael Graham started coverage of Netflix with a buy rating and a stock price target of $120, which is 25% above current levels. He said recent concerns over sluggish international subscriber growth are temporary, as they could last through the third quarter before strong growth returns in the fourth quarter and through 2018. "With vast potential in the other 179 markets and the potential to move from a top-of-market skim product to more of a mass-market product internationally, we see a long runway for growth," Graham wrote in a note to clients. "In the U.S., competitive offerings will proliferate, but in a new un-bundled OTT world..., Netflix should move from being a substitute good to a complimentary good relative to cable, and this should foster continued growth domestically." The stock, which has run up 13% since closing at a 4 1/2-month low on Monday, was still down 16% year to date, while the S&P 500 has gained 3.1%.

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