NEW YORK (Reuters) – Netflix Inc (NFLX.O) shares hit an all-time excessive on Friday as Goldman Sachs and different brokerages raised their worth targets on the world’s greatest online-streaming firm, citing its capability to boost charges with out scaring away clients.
The house of “Home of Playing cards” and “Narcos” has been spending closely on new exhibits and buying the rights to different TV sequence because it appears to be like to lure extra folks away from conventional cable TV.
To assist fund that spending, Netflix raised costs for 2 of its three major subscription plans earlier this month.
“Content material stays the first driver of subscriber development and engagement (and the pricing energy that comes with it),” Goldman analyst Heath Terry wrote in a be aware.
Netflix is scheduled to report its third-quarter earnings on Monday, though that quarter won’t replicate the current worth will increase, which take impact in November.
Goldman expects the corporate to report that it added a internet 1.1 million U.S. and four.three million worldwide subscribers within the third quarter, partly pushed by new exhibits corresponding to “Ozark.”
That quantity, which is Wall Avenue’s most intently watched gauge of the corporate’s development, is above most different analysts, who’re on common anticipating 810,000 U.S. and three.69 million worldwide subscriber additions, in line with FactSet.
“Whereas excessive expectations, notably in mild of the worth improve, might result in volatility submit outcomes, we imagine upward revisions to consensus estimates will finally drive additional outperformance,” Terry stated.
Goldman, which has a “purchase” score on the inventory, boosted its worth goal to $235 from $200. The median worth goal on Netflix’s inventory is $208, which has moved up 22 % over roughly three months, exhibiting Wall Avenue’s rising bullishness.
Netflix shares rose to an all-time excessive of $200.82 on Friday. They’ve jumped 58 % to this point this yr, choosing up 21 % because it final reported outcomes on July 17.
Goldman’s estimate of 5.four million total subscriber additions within the third quarter is above the 5.2 million new subscribers Netflix signed up within the second quarter, a determine which crushed market estimates.
JPMorgan’s Doug Anmuth stated he expects Netflix to have added 800,000 U.S. subscribers within the third quarter, helped by T-Cell U.S. Inc’s (TMUS.O) announcement final month that it will provide a free Netflix subscription with its limitless information household plans.
Anmuth raised his Netflix worth goal on Friday to $225 from $210.
Analysts count on Netflix to report a third-quarter adjusted revenue of 32 cents per share, and income up 30 % to $2.97 billion, in line with Thomson Reuters I/B/E/S.
Reporting by Sayantani Ghosh in New York; Enhancing by Invoice Rigby