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Morning Brief: Netflix Gets Boost From Wall Street Analysts

The streaming video company, a favorite of hedge funds, rose slightly on Friday as Wall Street analysts raised their price targets on its stock.

  • By Stephen Taub

Shares of Netflix — the “N” in the so-called FANG stocks — jumped 1.85 percent, to close at $199.49, on Friday after at least two sell-side analysts raised their price targets on the streaming video giant. The company is scheduled to report third-quarter results on Monday. According to CNBC, Goldman Sachs raised its target to $235 and maintained its buy rating, predicting the company will grow the number of subscribers above expectations for the next two quarters.

“We believe consensus subscriber estimates for Netflix ahead of Monday’s earnings remain too low, particularly for the quarter, 4Q, and beyond,” the bank reportedly wrote in a note to clients. In addition, JPMorgan Chase raised its target from $210 to $225 and kept its overweight rating. At the end of the second quarter, at least 87 hedge funds held a position in the stock, according to Goldman Sachs.

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Barclay’s raised its price target on hedge fund favorite Apple, from $146 to $161, and maintained its equal weight rating. In a note to clients, the bank says it expects “industry and media noise over supply chain constraints impacting” iPhone X volumes to persist into the first half of 2018, acknowledging that its research indicates that Apple faces some near-term headwinds due to some components.

However, it expects these forces to ease by the June 2018 quarter, which will set up bigger year-over-year growth numbers. This, in turn, will boost gross margins. At the end of the second quarter of this year, Apple was one of the most widely held stocks among hedge funds, with at least 136 funds reporting a position, according to Goldman Sachs. Shares of the iPhone maker rose 0.63 percent on Friday, to close at $156.99.

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Boaz Weinstein’s Saba Capital Management disclosed it owns 5.19 percent of Templeton Emerging Markets Income Fund, a closed-end mutual fund. However, the hedge fund firm, which in recent years has been successfully taking activist positions in closed-end funds trading at discounts to net asset value, made this filing using a 13G, suggesting the investment is passive.

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Two Sigma Ventures participated in the $18.5 million Series B financing of CoverWallet, which offers commercial insurance to small businesses online. The unit of Two Sigma has participated in previous financings of the company.

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