Loop Capital analyst, Alan Gould, has recently upgraded shares of Netflix (NFLX) to Buy from Hold, citing the streaming giant's strong competitive position.
Upgraded Price Target
Gould raised his price target on Netflix to $500 from $425, representing a potential 23% increase in the stock's value compared to its Thursday closing price.
With a 1.6% increase to $413.36 on Friday, Netflix's shares have soared by 40% this year.
Standing Out in the Streaming Wars
A Competitive Boost
Gould notes that rivals such as Walt Disney (DIS) and Amazon.com (AMZN) are simultaneously increasing prices and reducing content spend. This strategy is expected to further enhance Netflix's competitive position.
The Decline of Traditional TV
Furthermore, a current strike by screen actors and writers, demanding better residual pay from streaming services and regulation of artificial intelligence usage, is expected to hasten the decline of traditional television. Gould predicts that the upcoming fall TV season will consist primarily of sports, unscripted programming, and library content. This shift in consumer behavior is likely to steer viewers towards streaming platforms like Netflix.
Oppenheimer analyst Jason Helfstein, who rates Netflix as Outperform with a $515 price target, also expressed confidence in the company's ability to maintain its dominance. Helfstein attributes Netflix's success to its knack for producing captivating content and effectively monetizing it.