Shares of Netflix (NFLX) closed higher in today’s trading after Pivotal Research, via analyst Jeffrey Wlodarczak, reiterated its Buy rating on the video streamer and raised its price target from $800 to $900. The research firm expects global subscribers will reach 370 million in the medium-to-long term, which is up from a previous estimate of 348 million. This highlights Netflix’s strong business momentum while its competitors are struggling with mediocre results.
Wlodarczak also noted that many of Netflix’s streaming rivals are now selling their exclusive content to Netflix since its vast audience is needed to boost their content value. He believes that Netflix’s ability to leverage its scale and continue growing its subscriber base and average revenue per user will further strengthen its market position and widen the moat around its business model.
The firm suggests that Netflix could use its substantial balance sheet to acquire additional assets, such as content libraries or sports leagues, to further improve its platform and counter rising content costs.
It’s worth noting that, so far, Wlodarczak has enjoyed a 67% success rate on NFLX stock, with an average return of 20.12% per rating.
Is Netflix a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 24 Buys, 12 Holds, and one Sells assigned in the past three months, as indicated by the graphic below. After a 62% rally in its share price over the past year, the average NFLX price target of $706.26 per share implies 0.7% upside potential.
