By Emily Dattilo
Netflix has a new price target ceiling on Wall Street, thanks to one analyst who crowned the company the winner of the streaming wars.
Pivotal Research Group analyst Jeffrey Wlodarczak raised his price target on Netflix to $765 from $700 a share and maintained his Buy rating in a research report Friday, citing his higher forecasts for subscribers and average revenue per user (ARPU) for 2024 and beyond. The average price target for Wall Street analysts, according to FactSet, is $615.67.
Wlodarczak is expecting another solid quarter for Netflix even as prices increase. He highlighted multiple positives for the company including an impressive content slate, benefits from the ad-supported tier, and streaming peers selling their library to the company.
“In the end, our positive investment view remains unchanged, Netflix has won the streaming wars and their continued strong subscriber/ARPU and free cash flow generation should drive the shares higher,” he wrote.
“The key for NFLX going forward is to press their advantages and keep the flywheel going because the larger they get the more leverage they have over their peers, content creators, the better their product gets (allowing them to drive subscriber/ARPU growth) and the bigger the moat grows around their core business model,” he continued.
Netflix stock was up 0.9% to $622.71 in premarket trading, while futures tracking the S&P 500 were up 0.4%.
Coming into the session, Netflix shares have risen 27% this year, while media peers have traded mixed, with Walt Disney gaining 30%, Comcast down 6.3%, Charter Communications sliding 30%, and Roku falling 34%.
Write to Emily Dattilo at emily.dattilo@dowjones.com