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Why Netflix's International Bet Will Pay Off For Investors

Stocks in this article: NFLX

NEW YORK (TheStreet) - Netflix's (NFLX - Get Report) bet that even international subscribers will want to watch House of Cards is likely to pay off, according to JPMorgan Chase analyst Doug Anmuth.

Anmuth reiterated his "overweight" rating on the stock in a research note to clients on Thursday where he suggested that the streaming service's international opportunities are strong. Anmuth has a $500 price target for Netflix.

"We're increasingly confident in our Netflix international subscriber estimates as our bottom-up work suggests Netflix is likely to continue witnessing strong penetration internationally," Anmuth writes in a research note to clients in which he reiterates his "overweight" rating. The analyst estimates that Netflix's international market opportunity could be approximately 100 million broadband subscriptions. The company had approximately 10.5% penetration of this market at the end of 2013, he writes.

"We expect the late 2014 expansion in Western Europe to increase Netflix's international opportunity by ~60-70M broadband households," Anmuth wrote. "We believe Netflix is well-positioned to grow its penetration in Western Europe based on its broad content selection and merchandising, originals, and marketing capabilities."

By the end of 2015, Anmuth estimates Netflix's international subscribers will total 24.5 million -- roughly double its current international subscriber base -- and total 31.6 million at the end 2016.

Additionally, he's expecting "similar adoption curves in the UK/Ireland and Nordics, though we're conservatively modeling slightly slower adoption in the 2014 Europe expansion countries," Anmuth stated. "We expect Netflix to have ~5M and 8M subscribers in new European markets at the end of 2015 and 2016 respectively."

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