Netflix stock gains after Pivotal Research boosts target to new Street high of $650

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Pivotal Research Group analyst Jeffrey Wlodarczak upped his price target on Netflix Inc. shares to $650 from $600 Wednesday, with the new target representing the highest listed on FactSet. Wlodarczak sees room for continued momentum at Netflix even though the company saw a big first-half surge in user growth amid the COVID-19 crisis and there has been some concern among investors about whether the company will be able to stay on a strong trajectory now that many regions are lifting restrictions on activities outside the home. “[W]hile it could temporarily affect the stock, our thesis on Netflix would remain unchanged even if they were to report a flat quarterly subscriber result (which we are not calling for) given the massive beat in 1H, the difficulty of forecasting 3Q,” and favorable dynamics in streaming video, Wlodarczak wrote in a note to clients. He’s upbeat about Netflix’s ability to gain more subscribers down the line while also rolling out “material” price increases. Wlodarczak is also unfazed by Walt Disney Co.’s success with its own Disney+ streaming service, writing that that offering mainly appeals to children and could help push consumers to ditch their traditional pay-TV plans, a dynamic that would benefit Netflix as well. Netflix shares are up 2% in premarket trading Wednesday. They’ve added 56% so far this year as the S&P 500 has gained 4%.
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