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Why Netflix Stock Rose Today

By Evan Niu, CFA – Apr 15, 2020 at 4:30PM

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Three analysts boosted their price targets on Netflix shares while reiterating buy ratings.

What happened

Shares of Netflix (NFLX -1.78%) have risen today, finishing with gains of 3%, after several Wall Street analysts released bullish research notes ahead of the company's first-quarter earnings release next week. The stock set fresh all-time highs.

So what

No fewer than three firms -- Pivotal Research, Cowen, and Stifel -- reiterated buy ratings today while increasing their price targets. Pivotal boosted its price target from $425 to $490, the highest on Wall Street, as analyst Jeffrey Wlodarczak increased his estimates for subscriber additions due to stay-at-home orders around the world related to the coronavirus outbreak. "We believe the unfortunate COVID-19 situation is cementing NFLX's global [direct-to-consumer] dominance partly driven by the incremental content spend that is enabled by their massive and growing subscriber base," the analyst wrote.

Exterior of Netflix office in Los Angeles

Image source: Netflix.

Cowen analyst John Blackledge increased his price target by $20 to $445, while Stifel's Scott Devitt assigned a valuation estimate of $440. Devitt is modeling for a whopping 9.9 million global net subscriber additions in the first quarter, and believes that the crisis is accelerating adoption of the tech company's eponymous video-streaming service in markets where it has been underpenetrated thus far.

Now what

The bullish commentary comes a day after BofA Securities similarly increased its price target while reiterating a buy rating. The COVID-19 pandemic has forced much of the world's population to stay at home, and people watch more TV when they're stuck at home.

Netflix reports first-quarter results on April 21 and the consensus estimate currently calls for 7.9 million net subscriber additions.

Evan Niu, CFA owns shares of Netflix. The Motley Fool owns shares of and recommends Netflix. The Motley Fool has a disclosure policy.

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