Netflix shares continue to drive into record territory, as Wall Street anticipates another strong growth quarter for the streaming video giant, with consumers still hunkered down at home amid the Covid-19 pandemic.
In the March quarter, Netflix (ticker: NFLX) added 15.77 million new subscribers, more than twice the company’s original forecast of 7 million net adds. Netflix projected 7.5 million subscriber additions in the June quarter, and the Street expects the company to again top expectations.
Credit Suisse analyst Douglas Mitchelson this morning repeated his Outperform rating on Netflix shares, lifting his price target to $550, from $465. He says that subscriber growth expectations for the quarter are “justifiably high,” given the continued shutdown of movie theaters, the lack of sports and the shutdown of Hollywood film production, as well as building momentum in Asia, and a lack of price increases.
Mitchelson raised his June quarter estimate on net subscriber adds by 2.55 million, to 10.55 million. He also increased his subscriber count estimates for the rest of the year, projecting 5.2 million adds in the September quarter and 7.2 million in the December quarter.
The analyst finds concerns about competition to be overblown—he says Netflix has extended its lead this year against nearly all of the other major streaming services. He notes that the HBO Max and Disney+ launches had no apparent impact on the company’s performance.
Netflix on Tuesday was up 1%, to $498.52, above Monday’s record close at $493.81. The stock has rallied 15% since reporting March quarter results in late April.
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July 07, 2020 at 10:21PM
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Netflix Hits New High as Street Sees Continued Strong Subscriber Gains - Barron's
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