Netflix shares top $400 as bulls push price targets higher

Netflix bulls were on parade Tuesday — in tune with the machine-like upward trajectory of the video streaming company’s shares, which have doubled since the beginning of the year.

Wall Street is getting more bullish on Netflix as streaming capabilities become an ever bigger part of the global media landscape. GBH Insights analyst Dan Ives raised his price target on Netflix to a Street-high $500, only days after Goldman Sachs set what had been the previous high at $490. Ives sees stronger-than-expected subscriber growth this year and a potential benefit to Netflix if a bidding war between Comcast and Walt Disney drives Twenty-First Century Fox Inc. to break up some assets.

Netflix was among the top gainers in the S&P 500 Index on Tuesday, even as concern about an expanding trade war with China dragged the benchmark lower for a third day. The stock climbed as much as 3% Tuesday and crossed $400 apiece for the first time, putting it on pace to reach yet another record close. Netflix carries an average price target of $340, an 18% discount to Tuesday’s record high.

“The combination of engaging new content, momentum in overseas markets and a business model that scales globally increasingly sets Netflix apart from its legacy competitors,” wrote Monness Crespi analyst Brian White in a note Tuesday. White, lifting his price target to $460, expects the market to reward Netflix with higher price-to-earnings multiples as “global content is paving the way.”

As Netflix continues to invest in itself, coupled with other strategic initiatives such as a joint venture in the UK, Wall Street anticipates continued growth in subscribers and scale. Piper Jaffray analyst Michael Olson, who raised his price target to $420, expects subscriber growth in Netflix’s international segment to exceed the Wall Street consensus in the second quarter.

� L.P