Shares of Netflix (NASDAQ:NFLX) enjoyed gains as high as 6 percent on Thursday afternoon following an upgrade from BMO Capital and some reassuring data from eMarketer. Thursday’s pop adds to gains of over 21 percent over the last month, and erased a minor loss on Wednesday when the markets were surging.
Traders are way more bullish on the stock than analysts. BMO Capital’s price target, up to $88 from $65, is still about 8.7 percent below its current trading price of $96.40 per share. The firm also carries a “Market Perform” rating on the stock, which falls in line with a heavy majority of “Hold” ratings among analysts in general. The mean price target held by those analysts is just $68.04, a tremendous 29.4 percent below its current trading price.
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As mentioned, new eMarketer data scores some points for the bulls. The market-research firm reported that the number of U.S. households using a smart TV — one connected to the Internet — grew by nearly 25 percent in 2012, to 26.8 million. By the end of 2013, eMarketer is expecting that number to grow by nearly 31 percent to 35.1 million households, with double-digit growth through 2016.
This is a boon for both Netflix and its competitors. Amazon (NASDAQ:AMZN) claims over 27 million subscribers with access to its video service, a number that is increasingly competitive with Netflix’s subscriber base. Hulu — owned by a consortium of companies including Comcast (NASDAQ:CMCSA) and Disney (NYSE:DIS) — does not release its subscriber numbers, but there is speculation that Disney’s involvement could jeopardize Netflix’s relationship with the media empire in the future.
Basically, eMarketer says that the whole pie is growing, not that Netflix will necessarily beat out its competition. That sort of analysis emerges from other reports, which indicate that Netflix generates 18 times more traffic than Amazon and 22 times more traffic than Hulu.