Shares of Netflix (NFLX -2.25%) climbed 5.7% on Wednesday, following bullish analyst comments.
Pivotal Research analyst Jeffrey Wlodarczak reiterated his buy rating on Netflix's stock and boosted his price forecast from $600 to $650. His new target price represents potential gains for investors of roughly 22% from the stock's current price near $535.
Wlodarczak expects Netflix to remain the dominant global streaming platform, despite intensifying competition from the likes of Disney (DIS -3.79%) and other new entrants. In addition, Wlodarczak says the coronavirus pandemic is accelerating the trend toward streaming and other forms of home-based entertainment.
Netflix is one of the businesses best positioned to thrive in the current COVID-filled world. More people are watching streaming video in the safety and comfort of their own homes than ever before, and viewership should only continue to rise as people ditch cable for less expensive entertainment options.
Disney is a formidable rival, one not to be taken lightly. Yet many consumers see Disney+ and its primarily kids-focused content as complementary to Netflix's broader slate of shows and movies.
Moreover, even when combined, the cost to subscribe to both Disney+ and Netflix is still significantly cheaper than most cable packages. Thus, Netflix and Disney are both likely to prosper within the booming global streaming market in the years ahead.