Netflix Stock Fell Below $500 Level, but Analysts Set $650 Price Target for 2021

Netflix (NASDAQ: NFLX) stock price selloff is a buying opportunity for new investors in many analyst’s views. Shares of the largest streaming giant fell almost 8% since the beginning of this year.

Netflix $NTFLX chart 20210113

Multiple factors including subscription price hikes, lower subscriber additions, and easing social distancing policies are contributing to the Netflix stock price selloff. However, analysts believe the dip represents a buying opportunity because Netflix is likely to remain the leader in streaming services and the biggest beneficiary of users move from TV to streaming services.

Analysts Set Netflix Stock Target above $600

RBC has provided an Outperform rating to Netflix, with a $630 price target. The firm says some upside drivers, including sustainable scale, growth, and profitability are not reflecting in the stock price.

Moreover, Cowen looks more bullish on the future fundamentals of the streaming giant. The firm sets a $650 price target due to expectations for stronger than expected fourth-quarter results.

Cowen analyst John Blackledge also believes that the “elevated pricing power” should add to average revenue per user in 2021. The company has recently announced to lift subscription pricing in the UK and it is implementing the U.S. price hike.

On top, Cowen analyst says any near-term pressure on subscribers due to price hike is a buying opportunity.

Production Ramp-up could Support Stock Performance

The streaming giant saw disruption in production during the pandemic year. However, the company is now ramping up its productions. Ted Sarandos (co-CEO and chief content officer) said:

“Since the COVID shutdowns, we’ve completed production on over 50 productions, and we expect another 150 before the year’s over. So all that ramp-up puts us back to nearly fully operational in most parts of the world … materially we are back in business.”

Siraj Sarwar - Lead Analyst
@tradethedayfx
Siraj Sarwar has been performing analysis on the stock market, equity research and general business consultation. He regularly contributes articles on economics, commodities, and equities to the world's leading websites, including Trade the Day, SeekingAlpha, TheStreet, and MSN.
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