Netflix shares ended the US Wednesday trading session in the green, after Goldman Sachs analysts raised their price target for the stock by $100. The investment bank is positive on the streaming services’ content offerings and subscriber growth abilities.
Netflix is also reportedly set to add Minecraft story mode to its offerings, although the firm denies its entering the gaming industry.
Netflix shares closed 4.43% higher at $379.93. However, the stock is lower in after-hours activity.
Netflix price target boost
Goldman Sachs has lifted its price target for the stock by $100 to $490 – the highest target on Wall Street for the US streaming service.
“We believe the growing content offering and expanding distribution ecosystem will continue to drive subscriber growth above consensus expectations,” wrote analyst Terry Heath in a client note. “Based on the pace of both, we're raising our revenue estimates and price target.”
Heath estimates Netflix will add some 32.5 million net subscribers next year, which is above the average view.
“We believe Netflix's ability to spend significantly more on customer acquisition while still producing ~4pps of operating margin expansion for the full year, on our estimates, will allow the company to drive additional subscriber growth,” Heath wrote.
The stock made gains following that upgrade and the stock has now gained almost 90% year-to-date.
Netflix considering gaming?
The business says it isn’t. However, it is venturing into the outskirts of the gaming world with a planned Minecraft story mode programme for its streaming service.
Reports say that the US TV streaming service is working with Telltale Games to create the new stories for its TV audience. Minecraft is the first project.
The new TV experience, will allow watchers to choose their own path – something that Telltale Games considers to be a game, but that Netflix doesn’t.
“We don’t have any plans to get into gaming,” a Netflix spokesperson said, according to a TechCrunch article. “There’s a broad spectrum of entertainment available today. Games have become increasingly cinematic, but we view this as interactive narrative storytelling on our service,” it added.