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The reason for $ 1 is to keep Netflix, one of S & P's hottest shares



This week, there was some punch between Netflix's loyalties, as the video's "Roma" went away with numerous honors in the Hollywood Oscars.

While this critic's favorite does not win the best picture, some say it's only a matter of time before the company takes this biggest prize and breaks the doors of an old industry.

However, investors had little to complain about Netflix incendiary shares

NFLX, + 0.25%

with 32% so far this year and second best S & P 500, just behind GE

GE, + 6.39%

. To be sure, some of them have altitude sickness, given the upward trajectory of this market, and sizzling performances by companies like Netflix.

But wipe the sweat off your forehead. Our Call of the Day by Piper Jaffray Research Analysts Michael Olsen and Jung Kim Suggests $ 1

Cause to Continue Trusting and Buying the Streaming Giant

As you will remember earlier this year announced that it raised subscription prices by between 13% and 15% for 58 million US subscribers, increasing the price of its most popular plan to $ 13 from $ 11.

Piper studied 1100 international Netflix subscribers and found that 50 % would like to pay more than $ 1 per month for the service. "The increase in international ASP of $ 1 / mo (average selling price) would have a dramatic effect on our estimates for 2020, all others equal," they say.

"We expect Netflix to eradicate prices geographically, suggesting that the rise in international prices is likely to take effect at least in some international markets at the end of 19 and 2020," analysts say.

Decreasing numbers, they say that rising prices may mean 40% up for stocks up to over $ 500, even if only half of the increase in earnings per share has passed. They confirmed that they were overweight and the price of the price of $ 440. (By the way, they also think that the remaining 50% who said they would not pay more would probably end up paying if they press the buttons.) When investors make mistakes, this share manager and profits

Netflix's shares closed at $ 363.91 on Monday, so clearly there are some ways to go if Piper's goal is all right. Of course, some worry about gambling, given that competitors such as Hulu reacted quite quickly with price cuts. Analysts said they would watch for a more negative reaction from US subscribers, the number of which rose in the last quarter, although that was before the announcement of the price increase.

Netflix is ​​a major member of the FAANG band, which includes Facebook

FB, + 1.69%

Amazon

AMZN, + 0.09%

Apple

AAPL, + 0.73%

and Google's parent alphabet

GOOGL, + 0.07%

well ahead of the package in the past year when it comes to share gains. Opinion: How a new culture of IPOS technology can steal the sentiments of FAANG shares

The market

Some steam seems to go out of the market when commercial euphoria fades and investors are preparing for data and comment from Fed Chairman Jerome Powell, who heads to the Capitol Hill. Dow

YMH9, -0.34%

S & P 500

ESH9, -0.18%

and Nasdaq

NQH9, -0.33%

Futures are lower after action on Monday, which saw Dow

DJIA, + 0.23%

S & P 500

SPX, + 0.12%

and Nasdaq

COMP, + 0.36%

all squeak with profits.

RAW

CLJ9, + 0.23%

tries to recover some of the losses on Monday, while gold

GCJ9, -0.16%

is also down the dollar

DXY, -0.08%

is softer, to a large extent against the yen

USDJPY, -0.18%

and pound

GBPUSD, + 0.8093%

increasing from the titles of Brexit. As the Brexit watch works, the pound is valued only for a "soft" split

share of Asia pulled back and even China

SHCOMP, -0.67%

declined profits. Stocks in Europe

SXXP, -0.03%

have largely declined.

The Economy

This is a big week in data overflow reports that have to be released after being held back by the recent shutdown. For Tuesday, we have homes, building permits, Case-Shiller housing prices, consumer confidence, and sales of new homes.

About 9:45 pm Fed Powell's President will appear to Congress members, where he has to be welcomed with open arms to this overwhelming political transition. Yellen says POTUS has no conception of macroeconomic policy

Graphics

"Little or no influence". This is a little bit sad, but this is Barry Bannister's strategy in broker Stifel Nicolaus thinking about the S & P 500 at the moment. Our chart for the day comes from a batch that he sends to customers reporting this case.

As Bannister explains, S & P can not go much higher because it will not get much help from the revenue department – the cost-benefit ratio for companies is limited by positive real interest rates and the profit is slowing down. "True Feeds [rate] is 0.6%, which means the S & P 500 is lagging behind, 12-month p / e [ratio] 17 times," he said, adding that they see $ 2019 of $ 162 plus 5% a year on Wall Street's expectations for about $ 167. All of this together, and he says the S & P 500 looks entirely at a price of about 2750, which is 17 times more than this year's forecast of 162 dollar.


To be sure, the S & P 500 is struggling to reach a key resistance level of 2,800, which was the first time since the beginning of November on Monday, but was hit.

The buzz

Tesla

+ 1.38%

reaches after a judge orders CEO Elon Musk to be held in contempt of the twin court he sent in mid-February with details of productivity, SEC. In true muscular fashion, he was about to get the last word: "SEC forgot to read Tesla's transcription for earnings, which clearly shows 350k to 500k. How Uncomfortable … "

Home Depot

HD, -1.25%

is lower than the results, while AutoZone

AZO, -2.42%

is profitable. Macy

M, + 1.25%

will also report with Mylan

MYL, -0.93%

payable after the end. Home Deposits and Lowe: Sales from the same store complicated by exclusion, weather

Reports on Monday were Etsy

ETSY, + 4.13%

mosaic

MOS, + 1.46%

and Hertz

HTZ, + 2.77%

whose shares are exhausted after optimistic results. Shake Shack

SHAK, -1.21%

Health Health

THC, + 0.25%

is also reported. Opinion: Why the purchase of stocks from Walmart over Amazon is a better bet now

As tensions between auto and trade occur between the US and Europe, Peugeot claims to return to state after long absence.

] It's not just Powell, who is now heading to DK, executives from major pharmaceutical companies like AstraZeneca

AZN, + 1.37%

AZN, -1.26%

Bristol-Myers Squibb

BMY, -0.65% Merck

MRK, -0.48%

and Pfizer

PFE, + 0.28%

will be faced with the Senate Finance Committee for charges of too high drug prices.


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