Analysts are raising their Netflix stock price forecasts ahead of the report
Netflix (NFLX) shares have risen 21% over the past two months and are trading near historic price highs today. Over the past two weeks, analysts at investment companies such as Credit Suisse, Benchmark, Guggenheim, and KeyBanc have raised their target prices for Netflix shares.
So, Douglas Mitchelson from Credit Suisse raised his target price from $643 to $740, and this is not yet the maximum price on Wall Street. In addition, Hamilton Faber of Atlantic Equities increased his target price for Netflix shares from $690 to $780 in early September. These forecasts suggest an increase of 18% – 24% compared to the current level of $627 per Netflix share.
This is because analysts believe that Netflix stock will rise after the financial report for the third quarter of 2021, which is expected next week on Tuesday, October 19.
Last quarter’s report disappointed Netflix investors. First, the company reported the loss of 430,000 customers on its streaming service in the two largest regions – the United States and Canada for the first time in two years. The stock then fell 2.3% the day after the report. Market experts explained this by the consequences of widespread vaccination and consumers’ preference for offline entertainment after extended quarantine restrictions.
The Netflix report for the third quarter covers the period from July to September – people return to work, and children go to school. In general, in the fall, the time to watch new Netflix shows and movies increases.
The strong growth of stocks over the past two months is due to two factors:
the success of new products on the Netflix platform, especially the Korean drama series Squid Game, launched in October;
The news about the acquisition of Netflix game developer Night School Studio – the company intends to add a streaming game service to its platform, but few details are yet known.
Previously, Netflix created its online store where consumers can purchase exclusive clothing branded with popular Netflix series and movies, toys, household goods, and more.
With Walmart, the largest supermarket chain in the US, Netflix gets a vast sales channel and another way of advertising.
Walmart said Netflix Hub combines some of its most popular shows in its first digital showcase with a national retailer. Netflix Hub will offer exclusive products and innovative features.
Thus, Netflix continues to be the leader among companies offering streaming services while developing new industries – streaming games and retail to create additional sources of income and profit.
While some may find Netflix’s stock price already inflated, others raise valuations given the new opportunities. Nevertheless, Netflix has proven its advantages and potentially more than once, and today it seems that betting against Netflix shares is probably riskier than expecting further growth at record highs.
Netflix shares have risen 16% since the beginning of the year but achieved primary growth thanks to a jump in the last two months.
Netflix’s competitors – Amazon (AMZN), Disney (DIS), and Apple (AAPL) have shown the worst results since the beginning of 2021 (at the close of trading on Monday): -0.33%, -4.23%, and +7.63%, respectively. At the same time, Alphabet Google (GOOGL, GOOG), with the YouTube streaming service, shows a higher result – the shares have grown by 58.5% since the beginning of the year.
