Netflix shares closed higher in the US Monday amid news the online streaming business has agreed a deal with Barrack and Michelle Obama to produce numerous films and shows, in a multi-year deal.
The Obamas will produce the new content under Higher Ground Productions, their newly established company.
Netflix shares closed 2.36% higher at $331.82, in the US Monday. The stock is also higher in after-hours activity.
Netflix seal deal with Obamas
Netflix has been working hard to secure some of the most recognized names around to help to produce shows to keep its existing audience and also to grow it.
Indeed, while the TV streaming service recently bought the rights to two films featured at the Cannes Festival that it didn’t attend, it is keeping a big chunk of its $8 billion budget for the production of original films and series.
“Barack and I have always believed in the power of storytelling to inspire us, to make us think differently about the world around us, and to help us open our minds and hearts to others,” Mrs Obama said. “Netflix’s unparalleled service is a natural fit for the kinds of stories we want to share.”
Meanwhile, Netflix was also upbeat on the news:
“We are incredibly proud they [the Obamas} have chosen to make Netflix the home for their formidable storytelling abilities,” said Netflix chief content officer, Ted Sarandos.
Merrill Lynch raises price target
Separately and ahead of this confirmed deal, Merrill Lynch analysts have raised their price target for the tech stock as the investment bank says the US streaming service can grow its user base by 8% per year through until 2030.
In a research note to clients, Merrill Lynch analyst Nat Schindler reiterated its ‘buy’ rating on the stock and raised its price target a little to $352 from $347.
“We believe Netflix still has a considerable opportunity ahead if it can achieve reasonable penetration levels internationally,” Schindler said in a research note late last week.
“Netflix will face varying levels of competition, regulation and economic conditions in each individual market it participates in, but its content scale should allow it to become the dominant streaming player in virtually all markets,” Schindler added.