Wall Street analysts on Monday gave price-target hikes to shares of Netflix (NFLX), Microsoft (MSFT) and Dolby Laboratories (DLB), all of which are due to report June-quarter earnings.
Video Market Big Enough For Netflix, Amazon
Nomura Instinet analyst Anthony DiClemente reiterated his buy rating on internet television network Netflix and raised his price target to 175 from 165 on expectations for strong second-quarter results.
X Netflix was up 0.4% to close at 161.70 on the stock market today. Netflix shares were up more than 9% after reporting second-quarter results after the market close, going well past 177.
Netflix stock has formed a flat base over the past six weeks. If shares hold up at Tuesday's open, they will have surpassed a buy point of 166.97.
DiClemente said his new price target reflects his view that the global subscription video-on-demand market is large enough to support both Netflix and Amazon.com (AMZN) and that Netflix's long-term international margins will be much higher as the business scales.
Meanwhile, Rosenblatt Securities analyst Alan Gould maintained his neutral rating and 155 price target on Netflix.
Wall Street consensus estimates have Netflix adding 3.22 million net new subscribers in the second quarter and 3.97 million in the third quarter, he said.
IBD'S TAKE: The FANG group of closely watched internet stocks is made up of Facebook, Amazon, Netflix and Google-parent Alphabet. For the latest news on the group, visit IBD's page on FANG stocks.
Microsoft Survey Shows Cloud Momentum
Credit Suisse analyst Michael Nemeroff kept his outperform rating on Microsoft and upped his price target to 84 from 80.
Microsoft was up 0.8% to finish the regular trading session at 73.35 Monday, a record close. Microsoft broke out of a five-week flat base with a buy point of 72.99 on Friday.
The Redmond, Wash.-based software giant is due to report fiscal fourth-quarter results after the market close Thursday. Wall Street is modeling for Microsoft to earn 71 cents a share, up 3% year over year, on sales of $24.26 billion, up 7%, in the June quarter.
A new Credit Suisse survey points to an inflection point for Microsoft's Azure cloud-computing platform.
"Our recent enterprise software survey suggests that demand for Azure could be at a positive inflection point," Nemeroff said in a note to clients. "Specifically, we note that Microsoft saw the largest improvement among all cloud vendors, as 40% of respondents indicated that Azure was their preferred cloud vendor (up nearly double from 21% six months ago)."
The survey also noted strong pickup of Office 365 and Windows 10, he said.
Dolby Laboratories Sounds Good
Audio and video technology firm Dolby Laboratories received a price-target hike from Dougherty & Company.
Dougherty analyst Steven Frankel maintained his buy rating on Dolby and upped his price target to 62 from 57.
Dolby finished the trading day up 5.1% to 53.96. The stock broke out of a 15-week flat base with a buy point of 54.02 on Monday.
Frankel sees growing momentum behind Dolby's Atmos and Vision products.
San Francisco-based Dolby is scheduled to report fiscal third-quarter results after the close July 25.
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