Netflix Analyst Raises Stock Price Target to New Wall Street High of $670

Netflix headquarters
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Netflix headquarters

Shares of the streaming giant rise in Wednesday trading after Goldman Sachs also boosts its third-quarter subscriber forecast..

Netflix shares could rise as high as $670, Goldman Sachs analyst Heath Terry said in a report on Wednesday.

The $70 increase in his price target on the stock, from $600 previously, establishes a new high amid Wall Street observers. The analyst also raised his third-quarter prediction for subscriber growth from previously 4.5 million.

"We expect Netflix to report third-quarter results well above guidance and consensus expectations, with roughly 6 million net subscriber additions," Terry explained, citing an increase in content, a lack of competition "for entertainment hours and spend," and more time being spent at home by consumers amid the coronavirus pandemic. "While management is likely to continue to guide conservatively given outperformance earlier in the year and the massive uncertainty of the current environment, we believe consensus estimates for the fourth quarter and beyond remain too low."

Netflix is scheduled to report its third-quarter results after the stock market close on Tuesday.

Terry noted that there could be increased subscriber churn in the latest quarter "due to a less robust release slate and current reopening dynamics," but his report didn't mention any impact from the recent controversy surrounding French original film Cuties.

About Netflix's content offering in the third quarter, the Goldman analyst had this to say: "While the TV series slate in the quarter was notably missing Stranger Things and was back-half weighted, featuring shows such as Umbrella Academy (season 2), Ratched (season 1), Criminal: UK (season 2) and Away (season 1), the film slate was relatively robust when compared to prior year periods, featuring The Old Guard, Enola Holmes, The Devil All the Time, The Social Dilemma, and I’m Thinking of Ending Things, and Netflix entered the fourth quarter with four titles on IMDB’s 10 most popular movies list."

Another analyst on Wednesday also raised his Netflix stock price target, with Cowen's John Blackledge going from $550 to $625. "We expect paid net adds to come in above  guide, underpinned by elevated engagement due to COVID," he said about the third quarter. "Our monthly proprietary survey of 2,500 U.S. consumers suggests Netflix continues to see elevated pricing power in recent months."

As of 11 a.m. ET, Netflix's stock was up 1.44 percent at $562.07, near its 52-week and all-time high of $575.37.