Shares of Netflix (NFLX) – Get Report were higher Wednesday after the media-streaming major’s price target was raised to a Wall Street high $650 from $600 at Pivotal Research with a buy rating.
The new target indicates 28% potential upside from the stock’s Tuesday closing price. The stock recently was 3.1% higher at $521.50.
Netflix is in the middle of a “virtuous cycle” of subscribers paying for the company’s spending on new content, and that new content subsequently brings in more subscribers, Pivotal analyst Jeffrey Wlodarczak said in the note.
This cycle should help Netflix “remain as the dominant subscription-video-on-demand player for the foreseeable future,” Wlodarczak said.
Competition has increased as Comcast (CMCSA) – Get Report launched the Peacock streaming network and, to a lesser extent, from HBO Max (T) – Get Report and the return of sports, the analyst said.
“As NFLX continues