Netflix shares experience biggest jump in four years

Netflix shares climbed 15% on Wednesday to briefly trade at an all time high, a day after the company revealed in its 2020 fourth quarter earnings report that it was considering share buybacks and had exceeded 200 million subscribers for the first time.

This is the biggest jump since the company’s stock closed up 19% on October 18, 2016.

“We have gone from being a historic bear on the NFLX to being a card-carrying bull,” Wells Fargo analysts said Wednesday in a note to clients. The company also raised its price target to $ 700 per share, from $ 510. At least 15 other companies have also raised their price targets.

The video streaming giant has said it plans to become a positive cash flow after 2021, helping to make the case for analysts.

“We remain bulls on NFLX history as NFLX provides consumers with an increasingly compelling, unique entertainment experience on virtually any device, ad-free at a still relatively low cost,” analysts said on Wednesday. Pivotal Research Group.

Netflix has capitalized on the stay-at-home boom as the pandemic has left millions of people in need of daily entertainment from the comfort of their homes. This likely helped push its number of paying subscribers to over 200 million for the first time. It reached 100 million subscribers in 2017.

Netflix’s growth also comes as the streaming wars continue to escalate, with competition from Apple TV +, Discovery +, Disney +, HBO Max from WarnerMedia from AT&T and Peacock from parent company CNBC NBCUniversal. . Paramount + from ViacomCBS is expected to launch in March.

“We continue to believe the bear case around competition hampering the long-term success of the NFLX is overstated,” Jefferies analysts said Tuesday. “Some competitors will be successful, some will not, but the big picture is that there will be multiple winners in the OTT streaming space, and we expect NFLX to remain at the top of the food chain.”

Disclosure: NBCUniversal is the parent company of CNBC.