Please ensure Javascript is enabled for purposes of website accessibility

Why Netflix Stock Jumped Yet Again Today

By Evan Niu, CFA – Apr 16, 2020 at 2:12PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The video-streaming pioneer has been getting bullish upgrades from Wall Street all week.

What happened

Shares of Netflix (NFLX 0.71%) have jumped again today, up by 4% as of 12:30 p.m. EDT, after the company continued to receive bullish upgrades from Wall Street. Analysts have been releasing positive research notes on the dominant video streamer all week long.

So what

Goldman Sachs, Morgan Stanley, and J.P. Morgan all reiterated buy or overweight ratings today while increasing price targets. Morgan Stanley boosted its target from $400 to $450, JPMorgan went from $410 to $480, and Goldman ratcheted up its estimate from $430 to $490. That last target matches the Street high that Pivotal assigned to Netflix shares yesterday. Evercore increased its target from $300 to $350.

Exterior shot of Netflix office in Los Angeles

Image source: Netflix.

"Content additions to the platform, combined with the value of Netflix's library to those staying home during the COVID-19 crisis, drove this [expected] outperformance [in subscriber additions], more than offsetting the lingering impact of last year's price increase and growing competition in SVOD," Goldman Sachs analyst Heath Terry wrote in a research note to investors.

Morgan Stanley analyst Benjamin Swinburne likes that Netflix doesn't have an advertising business, as ad budgets are getting hurt by the coronavirus outbreak. J.P. Morgan analyst Doug Anmuth named Netflix one of his top internet stock picks right now, citing multiple other data points that suggest the shift to streaming is accelerating.

Now what

Countering the bulls, Wedbush's Michael Pachter was the lone analyst issuing a bearish note today. Pachter reiterated an underperform rating while adjusting his price target from $173 to $194, as he expects Netflix's "substantial cash burn" will continue for the foreseeable future. The virus is also disrupting content production across the board, and a lack of new shows and movies could result in higher subscriber churn later this year.

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

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
NFLX
$240.74 (0.71%) $1.70

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
331%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.