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Success of 'Bright' shows even Netflix's rotten movies are blockbuster hits

  • Bank of America Merrill Lynch reiterates its buy rating for Netflix shares, citing the success of its recent content releases.
  • The firm's analyst notes Netflix already announced a sequel to "Bright," which means it is satisfied with the performance of its first large budget movie.
Will Smith in Netflix film Bright.
Source: Netflix
Will Smith in Netflix film Bright.

Netflix's lead in the internet video streaming market is so large the company's poorly reviewed movies can do well, according to one Wall Street firm.

Bank of America Merrill Lynch reiterated its buy rating for Netflix shares, citing the success of its movie "Bright."

"Netflix ended the year with the release of major film Bright, which despite weak critic reviews, had an estimated 11mn viewers in the first three days, roughly on par with a successful blockbuster movie opening in the theaters and nearly the numbers we saw from the highly anticipated second season of Stranger Things," analyst Nat Schindler wrote in a note to clients Monday. "We expect Netflix to continue to increase spending on original content and feature films to grow subscribers, which would lead to healthy top line growth."

Schindler raised his price target for Netflix shares to $233 from $225, representing 10 percent upside from Monday's close.

"Bright" received the approval of just 27 percent of the critics on Rotten Tomatoes.

The analyst noted Netflix already announced a sequel to "Bright," which means it is satisfied with the performance of its first large budget movie. He also said the movie did better viewership than the company's "The Crown" season 2.

"We continue to think Netflix is in a strong position to capitalize on the shift to on demand viewing, the acceleration of cord cutting and the global demand for premium video content," he wrote. "Netflix is in a unique position where it can afford to spend on acquiring and producing premium content and still have that spend be efficient given its global subscriber base."