Netflix Inc. (NFLX) shares were higher Friday after analysts at Credit Suisse boosted its estimate for fourth quarter subscriber additions for the streaming entertainment service.
Credit Suisse analysts expects the group added 9.75 million users to its platform over the three months ending in December, well ahead of the company's guidance of 9.4 million. The bank also said hits such as Marvel's The Punisher, A Series of Unfortunate and Unbreakable Kimmy Schmidt finale will help lift 2019 subscribers by as much as 31 million over 2019, with the bulk of that -- 25.65 million -- coming from markets outside of the United States.
"We continue to believe competition, content and cost concerns are overblown and that the Street is too conservative regarding the growth outlook for Netflix," said Credit Suisse's media team, led by Douglas Mitchelson, adding that "the primary driver of Netflix shares will continue to be subscriber growth, especially if (average revenue per user), margins and (free cash flow) burn remain consistent with guidance and investor expectations."
Netflix shares gained 4.1% to $337.93 on Friday.
TheStreet's technical expert, Bruce Kamich, wrote earlier this week that while Netflix has shown "a number of bearish signals the past months", it's now exhibiting some bullish clues.
"Netflix recently closed above the now flat 50-day moving average line," Kamich said. "The slope of the 50-day line was negative from early August to now. NFLX closed below the cresting 200-day line in October and has now rallied back towards the underside of the now negatively sloped 200-day average."
Last week, SunTrust analysts lowered their price target on Netflix by around 13% -- from $410 to $355 per share -- but kept their "buy" rating in place, as it trimmed estimates for new domestic and international subscriber additions for the three months ending in December.
SunTrust sees global additions in the region of 8.65 million and noted that new market rivals, such as Walt Disney Co. (DIS) , Apple Inc. (AAPL) and AT&T (T) could challenge the group's business model later this year.
That said, SunTrust said it will maintain its "buy" rating "despite near-term subs adds tracking soft (we're watching for December data), with the content slate set to strengthen into mid-year including Stranger Things (we watch for tactical price increases into the strengthening content slate)."