Bank of America Merrill Lynch released a note to investors on Tuesday reiterating a buy rating on Netflix and raising its price objective to $199 from $184, but noting there’s a bull case where it sees Netflix at $300 a share.

It’s the most bullish note on Netflix released Tuesday morning.

The bank said Netflix would need to post faster pricing growth of 7 percent per year versus its current models for 5 percent, while also rapidly increasing subs to 250 million internationally, in order to hit the $300 per share bull case scenario.

“Pricing is a big driver as sub gains take more time to achieve offsetting valuation gains, but price changes are immediate rev. and margin lift,” Bank of America Merrill Lynch analyst Nat Schindler said in the note.

“We note that NFLX stated it expects “mid-single digit ARPU growth for the foreseeable future” and recently increased prices in Australia. We think further price increases in international markets could represent upside to our model and support our bull case scenario.”

The note follows Netflix’s Q2 earnings which hit after the bell on Monday and drove the stock up 10 percent after hours.

Shares are currently trading up 9.3 percent to $176 in the premarket. A move to $300 would represent a 70.5 percent gain from the premarket price.

Source: Tech CNBC
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