Shares of Netflix (NASDAQ: NFLX) started the trading week on a strong note on Monday, outperforming many other companies on the exchange. The streaming giant’s shares closed up more than 2% — more than double the gain in the benchmark S&P 500 index — following some favorable commentary from analysts.
The bull is coming
Netflix reported its second-quarter earnings on Friday morning, and investors, at least initially, rewarded the company by sending its stock price soaring in early trading. The appreciation rally probably should have lasted, but it didn’t. The company beat expectations by a wide margin on revenue, and revenue was slightly above the average analyst estimate, driven by impressive subscriber growth, which is crucial for Netflix.
The following trading day, analysts tracking the stock upgraded their outlook for Netflix.
On Monday, that included Baird and the ever-influential Citigroup. Of the two, Baird was (and remains) the more bullish on Netflix’s future. Baird analyst Vikram Kesabahotra raised his price target on the stock by $30 a share, for a new total of $730. He maintained an outperform (buy) recommendation.
Citigroup’s Jason Bazinet didn’t seem too excited about Netflix’s prospects, keeping his neutral recommendation unchanged, but raising his price target to $675 from $660. He acknowledged that the company’s future outlook has been revised “slightly upward.”
The timing could have been better
Netflix had the misfortune of reporting strong earnings at a time when investors were nervous about tech titles in general, with the recent CrowdStrike outage raising concerns about the tech sector’s resilience. But recent results make it clear that Netflix has been successful in maintaining its dominance at the top of the streaming video food chain.
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Citigroup is an advertising partner of The Ascent, a Motley Fool property. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares in and recommends CrowdStrike and Netflix. The Motley Fool has a disclosure policy.
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