Netflix Stock Higher on Price-Target Hike, Analyst Praise

The brokerage bunch is overwhelmingly bullish towards NFLX

Digital Content Manager
Jul 15, 2021 at 10:11 AM
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The shares of streaming giant Netflix Inc (NASDAQ:NFLX) are up 1.5% at $556.20 at last check, after the stock earned a price-target hike from UBS to $620 from $600. The analyst in coverage noted subscriber guidance is expected to cross one million net adds in the second quarter, as the company's content slate builds. The firm also noted Netflix is "a long-term secular winner with substantial scale, penetration upside, and pricing power." Plus, Netflix announced yesterday it hired a Facebook (FB) executive to lead a new video game unit, which will increase its addressable market beyond the traditional streaming business.

The bull note is interesting because analysts are extremely optimistic towards Netflix stock, with 22 of the 28 in question carrying a "buy" or better rating. Plus, the 12-month consensus target price of $614.18 is a substantial 11.8% premium to current levels.

Netflix stock is now trading at its highest level since April, though remains far off from its Jan. 20, all-time high of $593.28. In the last month, Netflix stock has added 11.3%, toppling its year-to-date breakeven level in the process.

Options traders have also taken a bullish stance. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NFLX sports a 50-day call/put volume ratio of 2.02, which stands higher than 97% of readings from the past year. This means long calls are being picked up at a quicker-than-usual clip.

Drilling down to today's options activity, 57,000 calls and 10,000 puts have crossed the tape, which is four times what is typically seen at this point. Most popular is the July 560 call, followed by the 555 call in the same series, with positions currently being opened at both. Buyers of those calls expect more upside for NFLX by the time these contracts expire at the close tomorrow.

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