UPDATE with the closing price. After Netflix reported better-than-expected subscriber growth and a key financial milestone, the company’s shares jumped 17% amid a wave of euphoric sentiment from Wall Street analysts.
Upgrades and increased pricing targets pleased Netflix after Tuesday night’s financial results, along with the company’s statement that it will turn positive in 2022 and won’t need more debt financing .
Shares of the streaming leader jumped at the opening bell today and never fell, hitting a high of $ 593.29 before closing at $ 586.34. The volume of trade was more than seven times higher than normal levels.
Eric Sheridan of UBS has upgraded Netflix to “buy” from “neutral,” explaining that he sees it as “a long-term winner as more consumer habits shift globally to a handful of media streaming platforms. The quarterly results report “will serve as an additional validation point,” he added.
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Sheridan also raised its 12-month price target to $ 650 from $ 540.
Along with UBS, Wells Fargo is another large institution issuing an upgrade, which has gone from “equal weight” to “overweight”.
Pivotal Research’s Jeffrey Wlodarczak offered what he said was Wall Street’s highest projection for Netflix stocks at $ 750, down from $ 660, with a “buy” rating still in place. Even though a price hike in the United States has just taken effect, Netflix is ”providing consumers with an increasingly compelling single entertainment experience on virtually any device, ad-free at a still relatively low cost,” the author wrote. analyst.
Michael Morris of Guggenheim described the earnings and financial outlook report as a “flex” for competitors. Benjamin Swinburne of Morgan Stanley also cited the cash flow forecast as a major turning point. “After shifting from a debt-funded business model from licensed programming to original programming over the past five years, Netflix has grown into a self-funded and now highly cash-flow-generating company. This will strengthen its competitive position, reduce risks for the company and strengthen our vision of “overweighting”. “
In addition to expressions of awe, there were nonetheless a few more measured opinions to be found on the streets.
MoffettNathanson’s Michael Nathanson maintained his “neutral” rating, but increased his price target from $ 45 to $ 465. He sees tough comparisons to 2020 as a limiting factor for the stock, but praised the company’s performance in a note to customers.
“Looking back on Netflix’s 2020 results, it is still striking how the Covid-19 pandemic has been nothing but a major boon to the company’s operations,” he said. -he writes. “While much of the world is still closed to their homes, with nowhere to go or what to spend their money on, consumer adoption of streaming services has been accelerated by years. With theatrical releases still scarce and a lack of new scripted programming, Netflix’s advantage over other entertainment choices has grown significantly over the past year.
Noticed bear Michael Pachter of Wedbush Securities is sticking to his “underperformance” rating on Netflix, but he has significantly increased his price target from $ 235 to $ 340. “While we are much more constructive about Netflix than we have been at any time for nearly a decade, we continue to question its assessment,” he wrote in a commentary. research note.