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Why Netflix Stock Popped Today

By Joe Tenebruso – Updated Oct 7, 2020 at 6:41PM

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Analysts see even more gains ahead for the streaming leader.

What happened

Shares of Netflix (NFLX -2.25%) climbed 5.7% on Wednesday, following bullish analyst comments.  

So what 

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.

A person is holding an upwardly sloping digital chart.

Analysts see strong returns ahead for Netflix's shareholders. Image source: Getty Images.

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.

Now what

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.

Joe Tenebruso owns shares of Walt Disney. The Motley Fool owns shares of and recommends Netflix and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney and short October 2020 $125 calls on Walt Disney. The Motley Fool has a disclosure policy.

Stocks Mentioned

Netflix Stock Quote
$305.56 (-2.25%) $-7.03
Walt Disney Stock Quote
Walt Disney
$92.29 (-3.79%) $-3.64

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

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