UBS is betting on Netflix, predicting a surge in subscriber numbers for the streaming service.
UBS has lifted Netflix’s (NFLX) price target ahead of the streaming service’s second quarter results report on July 20 due to forecasts of increased subscriptions.
Analyst John Hodulik, according to CNBC, said in a note to clients on Thursday that Netflix is on track to beat its modest Q2 guidance, and that subscribers will rise in the second half of the year.
“App downloads suggest upside to [managementprojection ]’s for 1M net adds in 2Q given strength in Asia, and we are boosting our estimate to 1.9M from 1.0M,” according to the note acquired by the news source. We foresee more content generation and the return of popular shows… as well as tentpole films… to contribute to future sub growth.”
Hodulik priced Netflix’s stock at $620 per share based on these forecasts, up from $600 – a 13 percent rise from where the stock finished on Wednesday. According to CNBC, UBS also confirmed its buy rating for Netflix in the note.
Netflix’s stock has stalled in 2021 as the economy improves with the introduction of COVID vaccines and the lifting of coronavirus restrictions, allowing individuals to return to entertainment options outside of their homes. In addition, according to CNBC, the stock has been hampered by the postponement of Hollywood film releases owing to pandemic limitations.
Streaming firms like Netflix thrived during the pandemic’s peak in 2020, when people were compelled to stay at home due to lockdowns. For amusement, many people went to these streaming platforms.
Netflix added 26 million customers in the second quarter of 2020, up from 12 million in 2019. It also recorded a 25 percent growth in revenue year over year, surpassing $1 billion.
Netflix is also working on a gaming service that might come next year.
As of 10:45 a.m., Netflix’s stock was trading at $543.06. On Thursday at 2:00 p.m. EDT, the stock was down $4.89, or 0.89 percent.